AGR case: SC orders telcos to file balance sheets of past 10 years

In its affidavit, Bharti Airtel on Thursday told the court it had paid a substantial part of its AGR dues, seeking 20 years to pay the rest.

The Supreme Court has opened a new front, asking Bharti Airtel and Vodafone Idea to submit their financial statements for the past 10 years in the long-winded adjusted gross revenue (AGR) case as the two telcos listed reasons for not furnishing bank guarantees and sought a 20-year term to pay their dues. The top court will next hear the case in the third week of July.

In its affidavit, Bharti Airtel on Thursday told the court it had paid a substantial part of its AGR dues, seeking 20 years to pay the rest. Explaining why furnishing a fresh bank guarantee was not necessary, the Sunil Mittal-led telco told the court Airtel was no fly-by-night operator. Financially stressed Vodafone Idea’s counsel said if it was forced to give a bank guarantee, the company would go down, hitting hundreds of jobs. The Department of Telecommunications (DoT) has sought time from the court to assess the affidavits of the telcos.

Responding to the court’s recent observation that there was no merit in the government asking public sector units to pay Rs 4-trillion AGR dues, The DoT has withdrawn the bulk of its demand. The DoT told the SC on Thursday that it had decided to withdraw 96 per cent of the Rs 4-trillion demand against non-telecom PSUs such as GAIL and Power Grid Corp. In effect, AGR dues worth Rs 3.7 billion have been taken off.

Solicitor General Tushar Mehta, representing the DoT, informed a three-judge bench headed by Justice Arun Mishra that the demand against non-telecom PSUs had been withdrawn.

AGR issue: Top FinMin, NITI, DoT officials talk relief measures for telcos

The telecom department officials remained tightlipped after the high-level meeting on Sunday.

An inter-ministerial group comprising officials from the finance ministry, NITI Aayog, and Department of Telecommunications on Sunday discussed urgent relief measures that could be extended to the telecom industry on adjusted gross revenue (AGR) issue.

The telecom department officials remained tightlipped after the high-level meeting on Sunday. The meeting comes at a time when the companies stare at Rs 1.47 trillion in unpaid dues — Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea owe about 60 per cent. Airtel has raised $3 billion in the past few months and is expected to have sufficient funds to tide over the AGR crisis. Vodafone Idea, which has paid just 7 per cent of its total Rs 53,000-crore statutory dues, remains vulnerable.

Bharti Airtel Chairman Sunil Mittal had last week appealed to the government for cut in levies and taxes, in order to pull the sector out of what he had described was an “unprecedented crisis”.

The government, meanwhile, is looking to strike a balance between complying with the Supreme Court order on AGR dues, ensuring health of the sector and safeguarding consumer interest.

Both Mittal and Vodafone Idea Chairman Kumar Mangalam Birla continued to meet top government functionaries throughout the last week to seek prompt measures that would offer a breather to the sector.

A top government official had recently said attempts were being made to balance the need for health of the sector, consumer interest while complying with the Supreme Court order on statutory dues.

Although the official had not elaborated, sector watchers had said the statement alluded to the government keen on ensuring adequate competition by retaining the present three-plus-one model of competition (three private players and one public sector company). The statutory dues arose after Supreme Court, in October last year, upheld the government’s position on including revenue from non-core businesses in calculating the annual AGR of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.