Oil India challenges DoT's demand notice for telco-like AGR dues

Says it does not have to pay on all revenues but only for telco services

State-owned Oil India (OIL) has said that it does not hold a UASL (universal service) licence as telcos do but one only for national long-distance (NLD) telephony, whose conditions do not square with the manner in which the Department of Telecommunications (DoT) has calculated its licence fees.

Under the terms of this licence, it does not have to pay licence fees on all revenues (include those for oil and gas) but only on those for telecom “activities” or “services”. 
 

In a clarification petition to the Supreme Court, OIL has said under the terms of the UASL licence, the definition of revenue for determining licence fees includes, among others things, “all miscellaneous revenues” of a company. However, under an NLD licence, there is no such condition.  After the court order directing telcos to pay over Rs 1.47 trillion on adjusted gross revenue (AGR), the Department of Telecommunications(DoT) issued notice to OIL on paying Rs 40,108 crore by reckoning on the revenues from oil and gas. 

It sent similar notices to other public-sector firms including GAIL, Power Grid Corporation of India, DMRC, and RailTel. It is estimated that dues from them are over Rs 2.27 trillion.

Questioning the DoT demand, OIL has said that since the inception of the NLD licence agreement till September last year, the DoT has been levying licence fees only on telecom activities and the company paid the amount every quarter. 
 

The petition said the DoT had been accepting the payments and never raised any additional demand until the court order came.  The company pointed out it was “inconceivable” how the DoT made such a demand now.  The petition added that a perusal of the definition of revenue made it clear that “other miscellaneous” did not form part of the NLD licence agreement. Also a further examination bore out that licence fees would be paid only on activities or services under the NLD licence. 

OIL has reinforced the same point by saying that the fact that licence fees have to be paid only on telecom activities is reflected in the NLD licence agreement saying the applicant should draw, keep, and furnish independent accounts for each telecom service.  OIL said it has been doing so by drawing separate accounts for its NLD service and submitting AGR figures based on that.  

OIL says it took the licence primarily to lay down optic fibres along its pipeline for captive use and only some additional bandwidth is leased out to telcos for optimum utilisation of resources. Based on this, it paid the DoT Rs 10.99 lakh as annual fees from 2007-08 to September 20, 2019. The new demand pertains to the same period.