Since DoT’s estimate of dues said it was ‘preliminary’, SC has to take into account the errors made in the calculations
Given the high interest levels in the past, this increased the AGR dues by almost four times.
Enough has been written about the problems with the original Supreme Court (SC) judgment on the AGR dues of telecom companies, including its acceptance of the Department of Telecommunications (DoT) view that license fees and spectrum usage charges (SUC) had to be paid on even non-telecom revenues such as interest earned on bank deposits. It was equally odd that SC decided to levy huge penalties and interest on what it decided were the AGR dues; after all, while the dispute on what comprised revenue had been going on for a long time, in 2006, 2007, 2011 and 2015, various courts had ruled in favour of the telcos. So, if the SC ruling on what actually comprised AGR was the first time that a definitive ruling was given on this, charging penalties seemed unfair.
Given the high interest levels in the past, this increased the AGR dues by almost four times. In which case, a new financial burden that has almost crippled the industry would not be as big a burden. Indeed, looked at another way, the government is earning a lot more now than it would have earned in the past had the definition of AGR been settled then. An exercise done by this newspaper revealed that, if the DoT had told telcos their revenues were Rs 100 more due to the wider definition of AGR in 2007, they would have paid Rs 12 more in that year. That same Rs 12 has become Rs 94 today thanks to the penalty clause, addition of interest and interest on the penalty. All of this, however, is water under the bridge since SC had refused to grant the telcos any relief when they challenged the original judgment.
Hopefully, the court will look at the new plea of the telcos sympathetically. They are not challenging the principle of what revenues are to be considered as part of the AGR, nor are they challenging whether the amount should be paid retrospectively and whether interest/penalty should be paid on it. All that they are saying is that DoT made several computational errors when it put out the AGR dues. Indeed, the DoT table that estimates the dues of each telco that is cited in the first SC ruling on AGR clearly says the dues are “as per preliminary assessments” and that these are “subject to further revisions due to departmental assessments, CAG audits … etc”. So, for instance, if telcos submitted their expenses for each telecom circle late to the DoT while depositing the AGR, the DoT would say there was a delay and then levy interest/penalty on it; there are several other such instances that have been cited by the telcos, including duplications in the revenue additions by DoT.
Sadly, in the past, when the telcos brought this up at the SC, the court ruled that this was akin to reopening its order. It is nothing of the sort, so hopefully, the SC will view this with an open mind. After all, if the DoT has made an error in its calculation, natural justice demands that this be fixed. Ideally, since the government is a party to the case, and it also stands to lose if the industry goes under, thanks to the huge payment obligations, it too should petition the court on the matter.