Oil India moves SC against DoT seeking Rs 48,000 cr payment on Rs 1.47 lakh cr revenue

On 22 January 2020, Oil India has filed a clarificatory/modificatory petition before the Supreme Court against its order and the next course of action will be based on the outcome of the petition.

Press Trust of India January 22, 2020 18:56:20 IST
Oil India moves SC against DoT seeking Rs 48,000 cr payment on Rs 1.47 lakh cr revenue
  • Till date, OIL has received demand notices for the period from FY 2007-08 to FY 2018-19 amounting to over Rs 48,000 crore including licence fee, penalties and interest

  • On 22 January 2020, OIL has filed a clarificatory/modificatory petition before the Supreme Court against its order and the next course of action will be based on the outcome of the petition

  • Besides GAIL and OIL, the DoT is seeking Rs 40,000 crore from PowerGrid which had both a national long-distance as well as an internet licence

New Delhi: State-owned Oil India Ltd (OIL) on Wednesday said it has filed a clarificatory/modificatory petition in the Supreme Court against a Rs 48,000 crore demand raised by the telecom department on cumulative revenue of Rs 1.47 lakh crore it had earned on an NLD telecom licence.

Following the 24 October Supreme Court ruling that non-telecom revenues of telecom firms such as Bharti Airtel and Vodafone Idea should be included for considering payments of government dues, the telecom department asked OIL to pay Rs 48,000 crore in principal dues together with interest and penalty. The dues sought are double the net worth of OIL.

"OIL had obtained a National Long Distance Service Licence (NLD Licence) to establish Supervisory Control and Data Acquisition System (SCADA System) for control, management, and protection of OIL's pipeline network used for transportation of crude oil, natural gas, and petroleum products," the company said in a statement.

Oil India moves SC against DoT seeking Rs 48000 cr payment on Rs 147 lakh cr revenue

File image of the Supreme Court. AP

The NLD licence is predominantly used for the SCADA system and only the spare bandwidth capacity is leased out to other telecom operators.

"As per the licence terms, licence fee is to be paid on gross total revenue from services provided under the NLD licence. Since the award of NLD licence, the cumulative revenue of Rs 1.47 lakh crore is earned by OIL from the leasing of spare bandwidth capacity on which all applicable licence fee and other statutory dues as per licence terms have been paid by OIL regularly," it said.

The company said based on the recent Supreme Court judgment "Department of Telecommunications (DoT) issued demand notices to OIL also seeking payment of licence fee on total reported revenue including revenue from sale of crude oil, natural gas etc, which neither relate to the NLD licence nor can be treated as supplementary/ value-added services related to the NLD licence."

"Till date, OIL has received demand notices for the period from FY 2007-08 to FY 2018-19 amounting to over Rs 48,000 crore including licence fee, penalties and interest," the statement said.

OIL said it has taken up the matter with the DoT and the Ministry of Petroleum and Natural Gas along with other affected central public sector enterprises and "explained the non-applicability of interpretation of AGR to non-telecom companies," it said.

"On 22 January 2020, OIL has filed a clarificatory/modificatory petition before the Supreme Court against its order and the next course of action will be based on the outcome of the petition," the statement added.

From gas utility GAIL, the DoT has sought Rs 1,72,655 crore in dues on IP-1 and IP-2 licences as well as Internet Service Provider (ISP) licence. In response, GAIL has told the DoT that it owes nothing more than what it has already paid to the government.

The firm told DoT that it had obtained ISP licence in 2002 for a period of 15 years, which expired in 2017. But GAIL never did any business under the licence, and since no revenue was generated it cannot pay any amount.

On IP-1 and IP-2 licences, GAIL has told the DoT that it generated Rs 35 crore of revenue since 2001-02 and not Rs 2,49,788 crore that has been considered for levying past dues, they said adding the revenue number the DoT is considering is after adding all the revenues that the company earned from gas trading and transportation business.

Sources said the dues being sought are more than three times the net worth of GAIL and several times the actual revenue earned.

While telcos such as Bharti Airtel and Vodafone Idea may have had non-telecom revenues generated from using the government licence and spectrum, firms such as GAIL and OIL had no such revenue.

The DoT is seeking Rs 1.47 lakh crore from all telcos in past statutory dues.

Besides GAIL and OIL, the DoT is seeking Rs 40,000 crore from PowerGrid which had both a national long-distance as well as an internet licence.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

SC allows Centre to file response to letter linking Chardham project to Uttarakhand disaster
India

SC allows Centre to file response to letter linking Chardham project to Uttarakhand disaster

The strategic 900-km Chardham highway project aims to provide all-weather connectivity to four holy towns Yamunotri, Gangotri, Kedarnath and Badrinath in Uttarakhand

Farmers' protest: SC-appointed panel discusses farm laws with Food Corporation of India, NABARD
India

Farmers' protest: SC-appointed panel discusses farm laws with Food Corporation of India, NABARD

The panel said it also held meetings with officials of the Commission for Agricultural Costs and Prices, the Union Consumer Affairs Department, and the Small Farmers' Agri-Business Consortium

Ranjan Gogoi sexual harassment case: SC closes suo motu proceedings to probe ‘larger conspiracy’
India

Ranjan Gogoi sexual harassment case: SC closes suo motu proceedings to probe ‘larger conspiracy’

The Bench noted that the possibility of retrieving electronic records is very little even though nearly two years have passed since hearing in this case began