Published on 14/02/2020 11:13:11 AM | Source: Live Mint

SC furious with DoT, issues contempt notice against telcos for not paying dues

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The Supreme Court on Friday ordered contempt proceedings against telecom service providers while making scathing observations on the officials of department of telecommunications (DoT) for allowing the firms delay payment of dues, ignoring its 24 October verdict that had directed them to pay DoT over ₹1 trillion in dues for under reporting their revenues.

The government had said on 23 January that it will not take coercive action against mobile service providers that failed to meet the court-directed deadline to pay dues after Vodafone Idea and Bharti Airtel sought more time.

The apex court had ended a 14-year legal battle between telecom companies and the DoT over what constituted AGR. The companies had contested DoT’s claim that items like dividend, rent and interest were part of AGR, and hence, the companies needed to include them while calculating their taxes. India levies licence fees of 8% of AGR on every telecom licence holder.

Vodafone Idea owes over Rs50,000 crore to DoT, while Bharti Airtel has to pay Rs35,586 crore. Tata Teleservices, which sold its mobile services business to Airtel, has dues of Rs14,000 crore. Jio is the only company that paid its dues. It was a small amount Rs60 crore as the company started operations only in 2016.

Bharti has raised the funds needed to pay the dues, while Vodafone has expressed its inability to pay because of lack of funds.

While the Supreme Court verdict had hit telcos, it had also made non-telecom firms holding licences for internal communications and signalling liable to pay licence fees on their entire revenue, even if they did not offer telecom services. DoT has sought ₹1.72 trillion from GAIL (India) Ltd, ₹48,000 crore from Oil India Ltd, ₹22,168 crore from Power Grid Corporation of India Ltd, ₹15,019 crore from Gujarat Narmada Valley Fertilisers and Chemicals Ltd and ₹5,841 crore plus interest from Delhi Metro Rail Corp Ltd (DMRC), among others.