DoT to issue notices as AGR receipts add up to only Rs 24,000 crore

The Department of Telecommunications (DoT) is preparing to issue fresh notices to telecom companies asking them how they had calculated their dues linked to adjusted gross revenue (AGR). The notices, likely to be issued this week, have been prompted by the wide gap between payments made by the industry and the government estimates on AGR dues of telcos.        

“We have so far received Rs 24,000 crore from the companies, which is way less than the amount that we had derived. They (telecom companies) will have to explain as to how they arrived at their numbers,” a senior DoT official said. 

With significant discrepancies cropping up in the AGR math, the industry may be facing a fresh round of dispute. According to  telecom industry representatives, there are only two ways to resolve the contentious issue. First, the government can refer the matter to the Comptroller and Auditor General of India (CAG) for an audit of all telecom books. Otherwise, telcos have the option of moving the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) if the government does not accept the operators’ calculations.

Rajan S Mathews, director general of the Cellular Operators Association of India (COAI), said, “We expect that the CAG will play a key part in auditing the books of telcos to help find the appropriate amount to be paid. Our second option is to go back to the TDSAT.“

In the midst of the AGR calculation controversy, Vodafone Idea CEO and MD Ravinder Takkar again met Telecom Secretary Anshu Prakash on Tuesday. Vodafone Idea has so far deposited Rs 3,500 crore in two tranches to the DoT and is still assessing its full AGR dues. According to the government’s calculation, Vodafone Idea owes more than Rs 50,000 crore in AGR liabilities.

Tata Teleservices, on Tuesday, made an ad hoc payment of Rs 2,000 crore towards AGR dues. It had earlier paid Rs 2,197 crore, saying it was the full and final AGR dues payment from the company, against the government estimate of around Rs 14,000 crore.

"This on account payment is subject to reconciliation after the conclusion of the process of computation and verification being conducted by the DoT spanning a period beginning from FY2007 and spread across 20 circles," the company said in a statement.

Bharti Airtel, on February 29, said it had completed assessing the dues related to AGR. As per the company's self-assessment exercise, the dues amount to Rs 13,004 which it has already paid. It has paid an additional Rs 5,000 crore, which the company said could be adjusted against any reconciliation exercise. Government calculations suggest the Sunil Bharti Mittal-led company owes Rs 35,500 crore to the DoT. The assessment of dues was done for the period between 2006-07 and February 2020.
 

Last week, DoT had operators to speed up their self-assessment of AGR dues and submit documents backing their calculations, after Bharti Airtel Ltd, Tata Teleservices Ltd and Vodafone Idea made partial payments.

The government is learnt to be exploring the possibility of roping in third-party audit firms to reconcile dues payable by telecom operators.

Last October, the Supreme Court had upheld the government’s definition of AGR, based on which the levies on telecom operators are calculated. The order dealt a blow to the telecom industry, which had for years argued that AGR should only include revenue from core telecom operations. Telecom operators now have to pay dues of the past 14 years with interest and fine.

In order to iron out the confusion over AGR dues calculations, the DoT has come out with a set of guidelines for one time re- verification to be carried out by the Controller of Communication Accounts. The government has pointed out in a note that there’s an urgent need to streamline deduction verification from 2006-7 to 2017-18.