DoT seeks legal view on AGR impact for non-telecom players

NEW DELHI: The Department of Telecommunications (DoT) is seeking legal opinion on the wider impact of the Supreme Court’s order on adjusted gross revenue (AGR), including whether it is applicable on a larger group of non-telecom companies holding telecom licences, and if so, the process to be adopted to raise demands from them for its dues.

“We are taking a legal opinion on the order’s wider ambit… we will actively work on the matter as legally advised after the telcos’ issue is addressed,” an official said.

Lawyers say that several companies — including GAIL, Power Grid Corporation, Delhi Metro, RailTel, among others — that are non-telcos but hold telecom licences to provide a range of offering such as internet services, national and international long-distance services and VSAT services, could fall under the DoT’s wider licence fee ambit. This, after the Supreme Court, in its order, equated gross revenue — for arriving at AGR — with “total revenue of licensee company”. Further, the court held that revenue arising out of non-telecom activities, with certain exceptions, will have to be included in gross revenue.

The official added that clarity is needed since there is ambiguity on the wider impact of the judgment. “Some companies likely to have been impacted by the judgment might not even know that DoT may raise demands and issue notices,” he said.

A second official said the government is dealing with a peculiar situation where even public sector units with telecom licences could be staring at huge liabilities. “This could be a case of revenue going from one pocket of the government to another,” he said and added that individual companies were assessing the situation and would work with their administrative ministries to resolve this matter. One particular option would be to take cabinet exemptions for such cases.

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The DoT last week issued notices to mobile companies and internet service providers (ISPs) to compute and pay the amount that they now owe the government on account of the Supreme Court verdict.


The apex court has mandated that the dues be paid up within three months of the October 24 order. Telcos are staring at licence fee, penalty and interest dues of nearly Rs 93,000 crore, as per DoT’s submissions to the apex court, but are seeking relief. Including spectrum usage charges, the dues go up to over Rs 1.3 lakh crore.

Industry estimates similar dues on non-telecom companies may amount to nearly ?2.28 lakh crore, if calculated since the time of getting their respective licences. These companies till now have been paying miniscule amounts as licence fee, if at all, to the DoT.

Government officials expect the non-telecom companies too to seek a clarification on the SC order’s ambit. The DoT has already ordered its nodal bodies to issue notices to ISPs, along with telcos and virtual network operators.

A senior official of association representing ISPs in India, warned that if the ambit of the judgment were to be widened, the impact could run into a much higher figure. “If it includes everyone, then there’s no end to who may be asked to pay and how much. Many of the licence holders under ISP category were not legally obliged to pay any licence fee before 2014, but now they may have to,” he added.


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