Indian Supreme Court under pressure for clarity on AGR deadline

Indian Supreme Court under pressure for clarity on AGR deadline

India’s Department of Telecommunications (DoT) has asked the country’s Supreme Court to clarify its previous ruling on the timeframe for the payment of dues derived from AGR (Adjusted Gross Revenue).

In its last ruling relating to AGR payments, the Supreme Court had set 31st March 2021 – the end of the fiscal year - as the deadline for operators to pay the first 10% of their dues, with the remainder to be paid in equal instalments annually up to 31st March 2031.

However, The Economic Times reports that some of the operators – including Bharti Airtel and Vodafone Idea (Vi) – claim that they have already paid a first instalment larger than the required 10%, and are therefore under no obligation to pay any more before the current fiscal year is out.

However, the DoT has countered this argument by claiming that the Supreme Court factored in payments already made by the operators prior to its ruling – in which case the companies would still have to pay 10% of their arrears before the next financial year.

India’s longstanding clashes over AGR – which is used to calculate licence fees – go all the way back to 1999, but the saga appeared to be finally over in October 2019 after the Supreme Court approved the DoT’s move to widen the definition of AGR to include revenue from sources other than telecoms.

However, as noted by CommsUpdate, the Supreme Court’s rulings - or lack thereof - on the matter have frequently caused confusion, with catastrophic consequences. The court typically rejected requests for clarification on specific aspects - such as whether AGR dues should also be paid by state-owned providers or companies that own infrastructure but do not provide services – which led to such firms receiving AGR demands for billions of rupees. It wasn’t until June 2020 that the Supreme Court finally conceded that such companies should have been exempt from the initial ruling.

In addition, even the companies that are legitimately required to pay AGR dues are in the dark about the actual amount owed, as the sums originally ordered by the Supreme Court were reached using calculations that the DoT has now admitted were incorrect. Airtel and Vi have both appealed the court ruling.