SC Gives Telecoms Ten Years to Pay AGR Dues

After a legal battle of twenty-one years, a three-judge bench of the Supreme Court has given the final verdict on the Adjusted Gross Revenue (“AGR”) dues of the Telecom Companies (“Telecoms”). The Court had already calculated the AGR dues in October 2019 and now the Court has given a time-frame of ten years to the Telecoms to pay the same to the Department of Communications (“DoT”).

The telecoms challenged the definition of AGR in the license agreements, i.e. dues from revenues of both telecom and non-telecom services. The Supreme Court, however, upheld the definition of DoT as per the license agreement and gave the final assessment of AGR dues to be 1.56 Lakh Crores.

The Court has however left the question of whether spectrums can be sold as part of IBC proceedings for the NCLT to decide. DoT argued that the spectrums cannot be sold. However telecoms believed that spectrum is an asset which was bought through auction and hence they have the right to sell the same if required.

The judgment has majorly impacted two telecom companies: Vodafone Idea and Bharti Airtel, which account for around half of the total AGR. Reliance Jio is the only telecom which has already paid its AGR dues. The Court has not made it clear whether Reliance Communications Spectrum and Bharti Airtel are supposed to pay the dues for Aircel or Videocon.



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Kirit P. Mehta School of Law Publications