AGR dues: Telcos approach DoT to rope in CAG to simultaneously audit books

Telecom operators have approached the Department of Telecommunications (DoT) to rope in the Comptroller and Auditor General (CAG) to simultaneously audit their books in order to arrive at a final resolution of the dues which they must pay on the  licence fee and spectrum user charges as required by the Supreme Court.   

“We have requested the DoT to finalise the amounts claimed by operators and resolve the matter so there is no prolonged debate. This will mean completing any required reviews, audits, and even bringing in the CAG to complete their audits, if this is advisable for a full and final resolution,” said Cellular Operators’ Association of India Director general Rajan Mathews.

“The CAG has a backlog in auditing our books, so they need to be brought in on the same page. Telcos do not want any fresh demands being raised a few years later.”

The demand makes sense, given the huge gap between what the operators, based on their assessment of the dues, are paying as compared with the DoT’s demand.

Based on current data, the total amount of AGR dues which has been paid to the government is Rs 25,892 crore — 17.6 per cent of total dues of Rs 146,336 crore specified by the court. Currently, only Bharti Airtel, Vodafone Idea, Tatas, and Reliance Jio have paid up in part or paid the full amount. But even here, out of their total dues of Rs 106,946 crore, they have paid only 18 per cent.

 

 

Telcos also have their own interpretation of a clause in the licence agreement. Under this clause, a penalty needs to be paid on a licence fee only if it falls short by more than 10 per cent of the payable licence fee.

This has been one key element of the basis on which they have calculated their dues and it could result in the matter going to the Telecommunications Dispute Settlement and Appellate Tribunal.   

Speaking on the large differential between what the telecom operators have paid and the DoT’s demand, Mathews points out that all telcos have paid the licence fee and SUC based on their own calculations and have disputed the DoT’s assessment in various legal forums based on anomalies found in the DoT’s calculations.  

“However, if the difference between the amount initially filed by operators and the final amount claimed by DoT and paid by operators is less than 10 per cent, then they have to pay the difference plus interest but not penalties,” said Mathews, adding this  is one of the reasons for the large anomaly between what telcos are submitting as payments and the DoT’s demand.