SC adjourns Vodafone Idea's AGR dues hearing to October 27
What's the story
The Supreme Court of India has once again adjourned the hearing in Vodafone Idea's (Vi) plea seeking waiver from paying interest, penalty, and interest on penalty on adjusted gross revenue (AGR) dues. The case was scheduled for today but will now be heard on October 27. Vi had challenged a fresh demand of ₹5,606 crore raised by the Department of Telecommunications (DoT) for FY2016-17.
Stakeholder involvement
Government's stake in Vi
The government has a nearly 50% stake in Vodafone Idea, making it a direct stakeholder in the operator's survival. Earlier this year, the Centre had said that efforts were underway to arrive at a resolution with the company. Vi had sought an order from DoT to "comprehensively re-assess and reconcile all AGR dues for the period up to FY2016-17 following 'Deduction Verification Guidelines'" dated February 3, 2020.
Court's decision
Supreme Court's decision on review plea
In a blow to telecom giants, including Bharti Airtel and Vodafone Idea, the Supreme Court had earlier refused to review its 2021 order rejecting their pleas for rectification of alleged errors in calculation of AGR dues. The court had dismissed these companies' pleas seeking review of the 2021 order on July 23, 2021. The telecom firms had claimed there were arithmetical errors in the calculation and cases of duplication of entries.
Payment schedule
Supreme Court's order on payment of dues
In September 2020, the Supreme Court gave a 10-year timeline to telecom service providers to pay ₹93,520 crore of AGR-related dues to the government. The court had ordered that telecom operators should pay 10% of their total dues as demanded by DoT by March 31, 2021. The remaining amount would be paid in yearly installments from April 1, 2021 to March 31, 2031.
AGR explained
What is AGR?
Adjusted Gross Revenue (AGR) is the revenue figure on which telecom companies pay license fees and spectrum charges to the government. Initially, AGR included both telecom revenue and non-telecom income such as interest on deposits or sale of assets. However, in 2021, the rules were amended to exclude non-telecom income from AGR, easing the financial burden on operators.