The Supreme Court on Monday rejected telecom giants Bharti Airtel and Vodafone Idea’s petitions seeking waiver of interest and penalty on AGR dues.<\/p>\n
A bench led Justice JB Pardiwala said the petitions are \u201cmisconceived.\u201d<\/p>\n
A couple of days after debt-laden Vodafone Idea (Vi) sought a waiver of more than \u20b945,000 crore in adjusted gross revenue (AGR) dues to ensure its \u201csurvival,\u201d Bharti Airtel followed suit on Saturday, raising similar concerns while seeking relief on an \u201cequitable basis.\u201d<\/p>\n
Bharti Airtel and its unit, Bharti Hexacom, moved a fresh petition in the Supreme Court for a waiver of \u20b934,745 crore in AGR dues toward interest, penalty, and interest on penalty. It said the September 1, 2020, judgement (on AGR) has \u201ccaused a crippling financial impact across the telecom sector.\u201d <\/p>\n
Clarifying that they are not challenging the Supreme Court ruling but only seeking a waiver of the burden of interest, penalty, as well as interest on penalty, the Bharti companies said relief on \u201cequitable basis\u201d is crucial for survival of all telecom operators.<\/p>\n
\u201cAbsence of equitable treatment for all licence holders\/telecom service providers (TSPs) by the government would not only violate the tenets of Article 14 (of the Constitution) but also impact the financial health of the entire telecom sector,\u201d said the joint petition. \u201cTherefore, to ensure a level playing field, the relief sought by way of the present petition, and that prayed for by Vi in a similar petition, must be granted on a non-discriminatory basis to all affected TSPs\/licence holders equally, who were parties to the SC\u2019s September 2020 judgement.\u201d <\/p>\n
Both petitions, by Vi and the Bharti companies, are listed for hearing on Monday before a bench comprising justices JB Pardiwala and R Mahadevan.<\/p>\n
While Airtel and Bharti Hexacom have to pay a principal amount of \u20b99,235 crore toward AGR dues, interest of \u20b921,850 crore, penalty and interest on penalty of \u20b93,995 crore and \u20b98,900 crore, respectively, are also payable.<\/p>\n
Recognising the government’s efforts to give several concessions and packages to the telecom companies, including Vi, following the AGR verdict, the two companies asked the top court to further direct the Centre to \u201cact fairly and on a non-discriminatory basis,\u201d and not insist for payment of interest, penalty and interest on penalty on AGR dues. <\/p>\n
The government had already provided substantial relief to Vi by converting its dues into equity, said the joint petition.<\/p>\n
The companies said the principal amount \u2014 \u20b99,235 crore \u2014 has ballooned to \u20b943,980 crore by addition of interest, penalty and interest on penalty, and, according to the Department of Telecommunications\u2019 (DoT) calculation, \u20b938,397 crore was due as on March 31.<\/p>\n
A substantial one-time liability of around \u20b943,980 crore was imposed on the Bharti Airtel Group, which was to be paid to the government within 10 years ending on March 31, 2031, according to the petition.<\/p>\n
Vodafone Idea on Thursday also sought a \u201cwaiver of rigours of payment of interest, penalty and interest on penalty under the judgement.\u201d In addition to the principal amount of \u20b912,797 crore in AGR dues, it is liable to pay an interest of \u20b928,294 crore, penalty of \u20b96,012 crore, and interest on penalty of \u20b911,151 crore, the company said in its petition.<\/p>\n
\u201cDue to the enormous AGR liability and no bank funding, Vodafone\u2019s very survival is at risk. Any disruption in services will have a direct and far-reaching bearing on approximately 200 million subscribers,\u201d Vi said in its plea.<\/p>\n
Its AGR liability as on March 31 was around \u20b983,400 crore, according to DoT\u2019s demand, the company said. An annual instalment of around \u20b918,000 crore is due on March 31, 2026.<\/p>\n
The Vi petition further stated that the government has \u201ca vital stake in the survival of the company.\u201d Even after converting some of its dues into almost 49% equity, the government still has dues of approximately \u20b91.19 lakh crore toward spectrum fee, in addition to AGR dues, to be recovered from Vodafone, it pointed out.<\/p>\n
Debt to Equity<\/p>\n
Soon after the government recently converted Vi\u2019s spectrum dues of over \u20b939,000 crore into equity, Airtel had also written to the telecom department, asking if it had the option to convert its \u20b941,000-crore AGR dues into equity. The government has not yet responded to that request.<\/p>\n
Upholding DoT\u2019s calculations on quantum of AGR demand, the apex court in February rejected a batch of review petitions by telecom operators seeking \u201crectification\u201d of arithmetical errors or inadvertent additions.<\/p>\n
The Supreme Court on September 19 last year dismissed a batch of curative petitions filed by telcos against imposition of penalty and interest on penalty, as well as a correction in what the affected carriers claimed were arithmetical errors in DoT\u2019s calculations.<\/p>\n
Of the total \u20b91.47 lakh crore of AGR dues \u2014 which telecom operators were required to pay by January 2020 as a result of the apex court\u2019s order \u2014 nearly 75% comprised interest, penalty and interest on penalty, the companies said. The licence fee dues totalled \u20b992,642 crore, while the spectrum usage charge was \u20b955,054 crore, according to the order of September 2020.<\/p>\n
DoT had then estimated cash-strapped Vodafone Idea\u2019s dues at \u20b958,300 crore, but the telco had self-assessed the dues at \u20b921,500 crore, and has so far paid Rs 7,900 crore. Bharti Airtel\u2019s dues, as per DoT, stood at \u20b944,000 crore, compared with the operator\u2019s own assessment of around \u20b913,000 crore. Bharti Airtel has so far paid \u20b918,000 crore, including a \u20b95,000-crore ad hoc payment.<\/p>\n
The Supreme Court asked the companies on September 1, 2020, that they needed to pay their arrears over a 10-year period, after paying 10% of the AGR dues upfront by March 31, 2021. Thereafter, the deferred payment cycle would start from 2026 and run until 2031, with the 10% amount to be paid by March 31 every year. The apex court had then said no revaluation of AGR dues would be allowed and any default would invite interest and penalty, along with contempt of court charges.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Supreme Court on Monday rejected telecom giants Bharti Airtel and Vodafone Idea’s petitions seeking waiver of interest and penalty on AGR dues. A bench led Justice JB Pardiwala said the petitions are \u201cmisconceived.\u201d A couple of days after debt-laden Vodafone Idea (Vi) sought a waiver of more than \u20b945,000 crore in adjusted gross revenue (AGR) dues to ensure its \u201csurvival,\u201d Bharti Airtel followed suit on Saturday, raising similar concerns while seeking relief on an \u201cequitable basis.\u201d Bharti Airtel and its unit, Bharti Hexacom, moved a fresh petition in the Supreme Court for a waiver of \u20b934,745 crore in AGR […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-932016","post","type-post","status-publish","format-standard","hentry","category-telecom"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/932016","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=932016"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/932016\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=932016"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=932016"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=932016"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}