The telecom companies owe the government Rs 92,642 crore in unpaid license fee and another Rs 55,054 crore in outstanding spectrum usage charge.
NEW DELHI: Vodafone Idea (VIL) and Bharti Airtel on Friday filed separate applications before the Supreme Court seeking a review of its October 24 verdict on adjusted gross revenue (AGR).
The apex court had ruled last month that AGR should include non-telecom receipts too and directed 16 telcos to pay pending licence fee dues worth Rs 92,640 crore to the Department of Telecom (DoT) within three months.
Among the reliefs sought by the companies in their review petitions is a prayer to waive off the penalties and interest on pending dues, sources say. Of the Rs 92,640 crore due, only Rs 23,189 crore is the
principal amount, while penalties and interest calculated over the duration of the 14-year long litigation comprise the rest. Airtel and VIL did not comment on the development.
Under the current taxation regime, telcos are mandated to pay the government licence fees (LF) and spectrum usage charges (SUC) calculated as a percentage of AGR. DoT estimates show telcos will need
to pay another Rs 55,055 crore toward pending SUC dues, bringing the total liability to over Rs 1.4 lakh crore.
Most of the telcos on the list are either defunct or non-operational, but the verdict had resulted in an immediate cash-flow crisis for Vodafone Idea and Bharti Airtel. While Bharti Airtel faces a total combined liability of Rs 35,586 crore towards LF and SUC dues, VIL is staring at a whopping Rs 53,038 crore cash outgo.
Providing for these liabilities (albeit partially) had seen both firms post their highest ever losses during the second quarter, with VIL’s Rs 50,922 crore net loss the largest recorded by an Indian company in history.
The two had consequently sought urgent relief from the government, red-flagging uncertainty over their ability to continue as going concerns.
The Union Cabinet reeled out a Rs 42,000-odd crore lifeline on Wednesday, approving the deferment of spectrum auction installments for financial year 2020-21 and 2021-22. But, the same day saw telecom
Minister Ravi Shankar Prasad reveal in Parliament that the Centre was not considering any relaxation in the AGR issue.
Analysts note that while the spectrum payments moratorium would relieve the financial burden on the companies partially, they were unlikely to offset the impact from the AGR bill. Especially in the
case of a struggling VIL.
“Even with the price hike in December, Vodafone Idea will need support,” Jefferies analysts said.
