Summary:
Vodafone Idea and Bharti Airtel are challenging the recent demands from the Department of Telecommunications (DOT) for additional adjusted gross revenue (AGR) dues. The dispute can still be claimed with some outstanding telecom circles and revenue accounting that were incomplete by the time of the 2019 Supreme Court order. Vi has filed a petition; Can follow Airtel.
Vodafone Idea (Vi) and Bharti Airtel are renewed on fresh AGR dues demands with DoT. Vi has formally challenged the demand of an additional ₹9,450 crore. The issue is whether the DoT can raise the outstanding amount for those circles whose accounting was ruled on the AGR during the Supreme Court of 2019.
What’s Behind the Dispute
- DoT’s Status: DoT says that additional demands are not about reorganizing already settled AGR liabilities, but the SC’s order is distributed to discontinue intervals in accounting for some telecom circle. According to the DoT, the notice was valid as some financials were still in the process.
- Vi’s position: Vodafone Idea is in controversies that these additional dues are fair, arguing that the Supreme Court has banned the revaluation of the AGR liabilities settled upto FY 2017, and the current demands of DoT are “unjust, inappropriate and arbitrary”.
- Airtel’s Role: Bharti Airtel can also challenge the demand DoT, as it has been done in previous cases on AGR issues.
Why It Matters
- Whether the DoT may require fees in circuits where the economy was not completed by the SC judgment can provide a precedent for how telecom revenue is reviewed and taxed.
- Vodafone Idea is already in a stressful financial situation, and large unplanned financial liabilities can give more stress to its operation.
- AGR outstanding calculations of telecommunications industry are looking for clear guidelines on accounting practices, and SC decisions are to be rebuilt or potentially to be implemented.
