In a major blow to telecom majors Bharti Airtel and Vodafone Idea, the Supreme Court on Thursday ruled that the existing definition of Adjusted Gross Revenue (AGR) will prevail. This implies that the two telecom providers will now have to pay Rs 50,000 crore to the Department of Telecommunications (DoT).
The issue had been dragging for the past 14 years with the telecom providers and DoT locked in battle over the definition of AGR. While the telecom providers insisted that AGR only included revenue from core operations, DoT maintained that AGR also included revenue from operations, other than core ones.
AGR assumes significance because it is the basis on which the DoT calculates levies payable by operators. Telecom companies pay 3-5% and 8% of the AGR as spectrum usage charges and licence fees, respectively, to DoT.