Non-telecom PSUs to file review plea in SC over AGR dues

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Updated: December 13, 2019 7:40:55 AM

As reported by FE, firms like Gail and PowerGrid had earlier also stated that they owe no dues and hence there was no question of paying anything. Gail had earlier told FE, “Gail (India) Ltd obtained ISP (Internet service provider) licence in year 2002, for a period of 15 years, which expired in 2017. However, Gail has never done any business under ISP licence. Since no business is done under ISP licence, there is no amount payable.”

Non telecom, PSU, review plea, SC, AGR dues, GAIL, PowerGrid, Oil India, Delhi Metro, department of telecommunications, dotQueried on the discrepancy between Gail’s no-dues claim and DoT’s number, Gail officials said that they are not aware how DoT got the numbers as they are not in receipt of any such communication from it.

Non-telecom PSUs GAIL, PowerGrid, Oil India and Delhi Metro, which together need to pay a total of over Rs 2 lakh crore as adjusted gross revenue (AGR) dues, are going to shortly file a review petition in the Supreme Court. Sources said that the PSUs are going to point out that they do not owe any dues to the government hence the apex court should direct the department of telecommunications (DoT) to withdraw its notices to them.

The core operations of these PSUs is not telecom but they have telecom licence of some nature or use spectrum for some part of their operations and hence are covered under the SC order.

Sources said GAIL chairman and managing director Ashutosh Karnatak recently met DoT secretary Anshu Prakash and told him that the PSU did not owe any dues to the government. Karnataka is scheduled to meet member-finance, Digital Communications Commission, on Friday. Officials of other PSUs are also expected to meet Prakash and the member-finance, DCC, shortly to convey the same.

As a result of the October 24 order of the SC that overall revenues of a firm be taken into account to compute the AGR for paying licence fee and spectrum usage charges, telecom operators need to pay dues worth Rs 1.47 lakh crore. These dues, according to the court order, need to be paid by January 24, 2020. While the telecom operators have filed a review petition seeking waiver from paying interest, penalty, and interest of penalty, none of the PSUs have sought any relief from the court so far.

As reported by FE, firms like Gail and PowerGrid had earlier also stated that they owe no dues and hence there was no question of paying anything. Gail had earlier told FE, “Gail (India) Ltd obtained ISP (Internet service provider) licence in year 2002, for a period of 15 years, which expired in 2017. However, Gail has never done any business under ISP licence. Since no business is done under ISP licence, there is no amount payable.”

Similarly, PowerGrid, which has both a national long distance as well as an ISP licence, had told FE that it has paid whatever is due as per its licence condition and owes nothing more to the government.

“When PowerGrid signed the licence agreement with DoT it was clear that only telecom revenue would be considered for the purpose of calculation of licence fees… telecom services contribute about 2% to the company’s revenue and the company made Rs 742 crore in 2018-19 from its telecom business which puts the licence fee at Rs 59 crore… Power Grid would not make any further payment to the DoT as it has already paid Rs 59 crore as licence fee, which is up to date,” officials had said.
Contrary to the claims of these PSUs, an internal note of DoT accessed by FE shows that as per Gail’s own calculation its AGR from the ISP licence is Rs 35 crore since 2001-02. Based on the DoT’s definition of AGR, which was upheld by the Supreme Court, the department has calculated Gail’s AGR at Rs 2.5 lakh crore and raised the due amount at Rs 1.72 lakh crore. This is the amount which, according to DoT, the PSU has to pay by January 24, 2020 to the government.

Queried on the discrepancy between Gail’s no-dues claim and DoT’s number, Gail officials said that they are not aware how DoT got the numbers as they are not in receipt of any such communication from it.

For Power Grid, DoT has pegged the AGR as claimed by the company at Rs 3,566 crore. After factoring in its own definition of AGR, DoT has calculated the AGR at Rs 1.25 lakh crore and raised a due demand of Rs 22,168 crore.

Such discrepancies are coming because the PSUs have only taken their gross revenue from telecom licences to calculate their AGR and licence fee, while the DoT has used the entire revenue of the company to compute the amount.

Public sector firms like Gail or Power Grid, or others did not create any telecom subsidiary which acquired the telecom licence. Rather the parent firm acquired the telecom licence. Therefore, going by the SC order their entire revenue needs to be taken into account rather than only telecom earnings.

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