The court warned of
contempt proceedings against officers involved in the move and asked the
government to reconsider charging dues from the state-run firms.
Telecom firms have long argued that
AGR should comprise only revenue accrued from core services
The
Supreme Court today sharply rebuked the Department of Telecommunications (DoT)
for demanding Rs 4 lakh crore from state-run firms and accused it of misusing
an earlier judgment. "This is wholly and totally impermissible," the
court said, referring to what the government's telecom department has demanded
from Public Sector Units (PSUs) like Oil India, Delhi Metro Rail Corporation
and Power Grid Corporation. The court warned of contempt proceedings against
officers involved in the move and asked the government to reconsider charging
dues from the state-run companies. The judges also agreed to consider a
government plan designed to rescue mobile-phone service providers, with riders,
and asked the telecom operators to come up with a roadmap for payment of dues.
Here are 10 things to know:
1.
Questioning the telecom
department on how telecom demands were made of state-run companies, a
three-judge bench said: "This is an outright misuse of our verdict. You
are making a demand of over (Rs) 4 lakh crores."
2.
As the court asked for an
affidavit from DoT officers how they demanded money from PSUs, the judges said:
"We will punish them! We will punish them!"
3.
The Supreme Court sought
the government's response on what guarantees the court can seek to ensure
telecom companies abide by a timeframe and payment schedule.
4.
Prime Minister Narendra
Modi's government had sought approval for several telecommunications firms,
including Vodafone Idea, to pay combined back-fees worth Rs 1.4 lakh crore ($19
billion) over 20 years.
5.
Solicitor General Tushar
Mehta, appearing for the telecom department, said the government has come out
with a bailout plan. "It would be difficult for the companies to pay the
amount in one go. If the court objects, it will adversely impact the telecom
sector, affect network, and the consumers will ultimately suffer," he
said.
6.
Mr Mehta said the
government will file an affidavit on why dues were raised against public sector
enterprises, to which the court responded by directing the government to
reconsider their demands from the companies.
7.
On whether telecom
companies should be allowed these to pay dues in a staggered fashion over 20
years, the bench responded: "Who has seen 20 years in the future?"
8.
The dispute centers around
the definition of adjusted gross revenue (AGR). Telecoms pay a percentage of
their revenues as license fee to government. They argue that non-core business
like rent or income from sale of handsets or roaming charges should not be
included in the revenue of which they pay a percentage - they want to pay only
on revenue earned from their core business. The court did not agree.
9.
In October last year, the
Supreme Court had allowed the telecom department to recover adjusted gross
revenue-related dues worth Rs 92,000 crore from telecom companies. Following
the court's order, the telecom department had sought a cumulative Rs 2.7 lakh
crore from GAIL India and other non-telecom PSUs.
10.
State-owned firms including
GAIL and Oil India challenged the demand, arguing that they did not owe any
dues as the AGR judgement was not applicable to them.
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