Budget 2020: Govt not expecting substantial gain from AGR dues in 2020-21

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February 1, 2020 8:43 PM

Budget 2020 India: The dues of non-telecom public sector firms, including Oil India, GAIL, and PowerGrid, as per demand raised by the Department of Telecommunications exceed Rs 2.4 lakh crore.

She was replying to a question on enhancing revenue collection target from the debt-ridden telecom sector.Budget 2020-21: She was replying to a question on enhancing revenue collection target from the debt-ridden telecom sector.

Union Budget 2020 India: It may have sought almost Rs 4 lakh crore from telecom and non-telecom companies in past dues but the government is not expecting any substantial windfall in the coming year.

Finance Minister Nirmala Sitharaman, who provisioned Rs 1.3 lakh crore in receipts from telecom licence fee and spectrum usage charge for the next financial year, said the government is looking to address dispute over what revenues should be taken for calculating dues in a more comprehensive manner.

In her post-Budget press conference, she said the issue is a complex one and the industry players are in dialogue with the government to resolve it.

“I don’t think I am looking at it purely from what the government will collect. This particular development in the telecom sector is something which all of us has watched, going through the proceedings of the court… it would not be right for me to just comment and say we are looking at this number or that,” Sitharaman said.

She was replying to a question on enhancing revenue collection target from the debt-ridden telecom sector.

The government on Saturday increased the revenue estimate from the debt-ridden telecom sector by over two-folds to Rs 1.33 lakh crore for 2020-21 as compared to collection target in the current financial year, mainly on account of adjusted gross revenue dues.

“It is fairly complex issue. The industry and affected parties are also in touch with the government. we are engaging with them, the department is engaging with them. We will be addressing this in more comprehensive manner,” Sitharaman said.

The government expects a revenue of Rs 58,686.64 crore under communications head in the current financial year as against a budgeted amount of Rs 50,519.8 crore in 2019-20.

“Receipts under ‘Other Communication Services’ mainly relate to the licence fees from telecom operators and receipts on account of spectrum usage charges,” the Budget documents said.

The debt-laden telecom industry is saddled with Rs 1.47 lakh crore in additional statutory dues in the wake of a recent Supreme Court ruling on adjusted gross revenue (AGR). Telecom companies owe the government Rs 92,642 crore in unpaid licence fee, and another Rs 55,054 crore in outstanding spectrum usage charges.

The dues of non-telecom public sector firms, including Oil India, GAIL, and PowerGrid, as per demand raised by the Department of Telecommunications exceed Rs 2.4 lakh crore.

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ICRA Assistant Vice-President (Corporate Ratings) Ankit Jain said that despite deferral of spectrum payments due in the financial year 2020-21 and financial year 2021-22, higher budgetary estimates for 2020-21 can be attributable to some participation in 5G spectrum auctions and expectation of payments of AGR-related dues.

According to government data, the liabilities in the case of Bharti Airtel add up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is the SUC dues (excluding the dues of Telenor and Tata Teleservices).

In the case of Vodafone Idea, this number stands at a cumulative Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in licence fee.

The remaining liability is with state-owned BSNL and MTNL and some of the shut or bankrupt telecom companies.

The Supreme Court had allowed three months to the affected telecom operators to cough up the amounts due to the government — whose deadline expired on January 23 — although the DoT did not take any coercive action against defaulters as their appeals seeking relaxation in payment timelines in pending in the apex court’s order.

Bharti Airtel, Vodafone Idea Ltd and Tata Teleservices have jointly filed a modification application in the Supreme Court seeking more time to pay the statutory dues.

The fresh plea for relief on the payment schedule came after the Supreme Court last month dismissed the review petitions filed by telecom companies against the apex court’s October 24, 2019, verdict.

The DoT is also working on spectrum auction, which is likely to be held in April-May 2020.

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