Government waives off Railtel’s Rs 1,553-crore of AGR dues

The government is all set to waive off retrospective adjusted gross revenue (AGR) dues levied on Railtel, a Ministry of Railways enterprise, and is likely to intimate the top court early next month.

The dispute resolution between the Department of Telecommunications (DoT) and RailTel Corporation comes on the backdrop of a finding by a committee of secretaries.

In a note, the department said that Railtel, being a public sector undertaking, be given the same treatment as other state-owned firms, whose demands on non-telecom revenue was withdrawn earlier.

The demands related to the non-telecom revenue are withdrawn by DoT in the public interest, the note dated March 20, 2025 said, adding that the department would inform the Supreme Court about the decision in its annual AGR compliance affidavit.

On October 10, 2024, the department in its assessment included comprehensive revenue including non-telecom income including from railways operations, consultancy charges and electricity fee, and charges in interest from other income sources, to the tune of Rs 1,553-crore.

On its part, the Railway Board informed that no other state-owned firm has paid licence fee on such non-telecom revenue, and pointed out that the licence fee under part B demand stood at Rs 1553-crore while company’s net worth was Rs 1,827-crore as on March 31, 2024.

The telecom department, during the resolution process, however, informed the committee that the demand “might have substantial adverse impact on its market capitalisation” and the company’s existence.

Following inter-ministerial discussions, the DoT decided to withdraw assessment dated October 10, 2024 in public interest, since it has been certified as non-telecom revenue by statutory auditors of the company and accepted by the assessing authority.

The sources said that in its annual status affidavit, the department would apprise the apex court about the Railtel waiver.

The department categorised Railtel as an internet service provider and a national long-distance service provider, and sought AGR dues.

AGR is computed on the basis of a total revenue generated by a telecommunication services operator, including income from telecom and non-telecom sources such as services, earnings from interest, and asset sales.

On the back of massive potential outgo, the AGR matter snowballed into a controversy with private telecom carriers exhausting legal remedies.

The matter stems from a 2019 Supreme Court decision that mandated telecom companies to include non-core revenues in their AGR calculations retrospectively.

Vodafone Idea Limited (Vi) owes Rs 37,000 crore to the government in AGR dues and spectrum charges.

Early this month, Vodafone Idea, a joint venture between Aditya Birla group and the UK’s Vodafone Plc, sought government intervention to convert existing dues into more equity. If approved, the government’s stake will go up to 49% in Akshaya Moondra-headed stressed telecom company.