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20-year window to clear telco dues
Why is it in the news?
- The Central government did a virtual U-turn by urging the court to give the companies a 20-year window to pay the money back.
- The decision came 5 months after winning its legal battle in the Supreme Court against telecom majors, including Vodafone and Bharti Airtel, for payment of Adjusted Gross Revenue (AGR) dues.
More in the news
- In an application mentioned for urgent hearing in the top court, the government said it has devised a “formula” to soften the blow of the October 24, 2019 judgment.
- In October 2019, Supreme Court had upheld the Department of Telecom’s move to recover adjusted gross revenue (AGR) of about ₹92,000 crore from telcos.
- What is AGR Issue?
(1) Telecom operators are required to pay licence fee and spectrum charges in the form of ‘revenue share’ to the Centre.
(2) The revenue amount used to calculate this revenue share is termed as the AGR.
(3) According to government, the calculations should incorporate all revenues earned by a telecom company.
(4) All revenues including from non-telecom sources such as deposit interests and sale of assets.
(5) The companies, however, have been of the view that AGR should comprise the revenues generated from telecom services only and non-telecom revenues should be kept out of it.
(6) Finally, the Supreme Court upheld the government's definition of adjusted gross revenue (AGR) in October judgment.
Source
The Hindu