Indian AGR payments: will self-assessment buy time?

Indian AGR payments: will self-assessment buy time?

The news that self-assessment done by Indian telecommunication companies for AGR dues has come up with much lower figures than the government’s has added a further layer of confusion to an already uncertain situation.

The Supreme Court ruling, in October last year, that the Indian government was right to include revenue from non-core businesses in calculating the annual AGR of telecom companies has left many players in the market facing potentially damaging debts. Now, it seems, the firms have done their own calculations on the amount owed, offering self-assessments of AGR dues well below the government’s figures.

Indian press reports indicate that a full evaluation of the recent self-assessment done by telecommunications companies for AGR dues could take at least six months, potentially buying more time for the hard-pressed companies.

A senior telecom department official said that an evaluation of the self-assessment will require checking scores of documents spread over multiple years. Of the estimated dues, which include interest and penalties for late payments, Airtel and Vodafone Idea account for about 60 per cent.

Vodafone Idea in particular has calculated its total dues to the government at around $2.9 billion, less than half the telecom department estimate.

The Indian government has said that it has so far received about $3.5 billion from telecommunications companies towards statutory dues. The minister of state for communications, Sanjay Dhotre, has said the government has again directed the operators to make full payments.

Vodafone Idea alone is said to owe over $7 billion in AGR dues after the Supreme Court ruling. The minister said that it has paid about $474 million so far.

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