SC Adjourns VI’s AGR Dues Plea, Next Hearing Likely on October 27

The Supreme Court has adjourned Vodafone Idea’s plea seeking waiver from paying interest, penalty and interest on penalty on the adjusted gross revenue (AGR) dues demand raised by the Department of Telecommunications (DoT). Currently, the hearing of the case has likely been shifted to October 27.

Following the announcement, the telecom firm’s shares declined 3% on Monday. This is the fourth time in the past month that the hearing has been deferred.

A fresh plea against DoT’s fresh demand of Rs 5,606 crore relating to the financial year 2016–17 has been filed by Vi. The central government had earlier noted that efforts were underway to arrive at a resolution with the company.

According to the law officer, the government held nearly 50% equity in Vodafone Idea, thereby making it a direct stakeholder in the operator’s survival.

An Economic Times report stated that Vi had sought a direction to the Telecommunications department to "comprehensively re-assess and reconcile all AGR dues for the period up to FY 2016-17 following the 'Deduction Verification Guidelines” dated February 3, 2020.

In a major setback to big telecom faces earlier this year, including Bharti Airtel and Vodafone Idea, the top court had refused to review its 2021 order rejecting their pleas for rectification of alleged errors in calculation of AGR dues payable by them. Additionally, the SC had dismissed their pleas seeking review of the 2021 order.

As per the telecom companies, arithmetical errors in the calculation can be rectified and there were cases of duplication of entries.

The top court in September 2020 fixed a time frame of 10 years for telecom service providers struggling to pay Rs 93,520 crore of AGR-related dues to clear their outstanding amount to the government.

In September 2020, the apex court in its order stated that telecom operators should make the payment of 10 per cent of the total dues as demanded by the DoT by March 31, 2021 and the rest amount would be paid in yearly instalments commencing from April 1, 2021 to March 31, 2031.

The Supreme Court, which held the demand raised by the DoT with respect to AGR dues as final, said there should neither be a dispute raised by the telecom companies nor any re-assessment. Back in 2019, the apex court delivered its verdict on the AGR issue. The DoT also moved a plea in the top court asking for a staggered payment of the dues by telcos over 20 years.

Adjusted Gross Revenue (AGR) refers to the income figure used to calculate the license fees and spectrum charges that telecom companies must pay to the government. Earlier, the fees included both telecom revenue and non-telecom income (like interest from deposits or asset sales). However, in 2021, the rules were relaxed so that non-telecom income is no longer part of AGR, reducing the financial load on operators.