 "SC says self-assessment of AGR dues violation of order; telecom stocks plunge, Vodafone Idea plummets 35%")
The Supreme Court on Wednesday said that the self-assessment of AGR dues by the Department of Telecommunication is sheer violation of court orders.
#AGR Case | SC Observations: if reassessment is permitted, it will be a fraud on this court pic.twitter.com/sR0bGZonyn
— CNBC-TV18 (@CNBCTV18Live) March 18, 2020
Hearing the Department of Telecommunications plea, a Supreme Court bench held that no further objections to its orders would be allowed against the Adjusted Gross Revenue (AGR) dues. The Supreme Court will next hear the AGR case after two weeks. The apex court said that Department of Telecommunication’s (DoT) demand has been confirmed by the court and how can there be self-assessment. [caption id=“attachment_2351458” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] “This cannot be allowed when our order clearly spells out the dues,” the Supreme Court said. Following the Supreme Court order, the shares of Vodafone Idea plunged 35 percent in the intra-day trade. Bharti Airtel also fell nearly 3 percent. Vodafone Idea recently computed its AGR dues at Rs 21,533 crore, way below the over Rs 58,000 crore pegged by the Department of Telecommunications (DoT). The Supreme Court also questioned the Solicitor General on telcos’ self-assessments without permission of the court, calling it a contempt of court. The court categorically said it was a matter of public money that has gone unpaid for 20 years, and that that the telcos were trying to influence public opinion through the media.
#AGR Case | Kapil Sibal tells Supreme Court, should not go back on the amount, only the manner of payment can be looked at pic.twitter.com/w0WY3iN7Ve
— CNBC-TV18 (@CNBCTV18Live) March 18, 2020
The Supreme Court observed, “If reassessment is permitted, it will be a fraud on this court.” The top court noted that it dwelled on the amounts payable at length. Even the DoT fought tooth and nail regarding principal, interest and penalty. “If you want a very big exercise, we will do it. We will go through every file noting of the DoT,” the Supreme Court said. The Supreme Court said that it did not appreciate actions of telecom companies and would hold the managind directors personally accountable. “Actions of telecom companies are tantamount to seeking to bypass our judgment. No further objection will be entertained,” the apex court said. The top court said that it cannot allow encroachment of the SC judgment. “If we will allow these pleas, SC will be party to fraud. We say with all responsibility that we cannot allow reopening,” the court said. Immediately after the Supreme Court order, the Sensex nosedived 1005.61 points or 3.29 percent to 29,573.48 Nifty tanks 311.40 points or 3.47 percent at 8,655.65 in the early afternoon trade.
#AGR Case | Supreme Court says companies are trying to influence us through the media pic.twitter.com/sfQNNLgIs7
— CNBC-TV18 (@CNBCTV18Live) March 18, 2020
On Monday, Vodafone Idea said it made an additional payment of Rs 3,354 crore towards AGR to the DoT, thereby completing payment of principal amount calculated on self-assessment basis, according to news reports. With this fresh payment, Vodafone Idea (VIL) has paid Rs 6,854 crore towards AGR dues. Vodafone Idea had pegged its total dues to the government following a Supreme Court order at Rs 21,533 crore—less than half of what the Telecom Department has estimated, even as the Vodafone Group CEO Nick Read last week indicated keenness to make a “new, good beginning” in India. Vodafone Idea had earlier paid Rs 3,500 crore out of the “self-assessed” liability of Rs 21,533 crore. The DoT has raised total demand of around Rs 53,000 core for AGR liability of VIL which included interest, penalty and interest on delay in payment of the amount. VIL said it had filed its self-assessment of the AGR liabilities with the DoT pm on 6 March, 2020, in which AGR liability principal amount of Rs 6,854 crore was determined for the period from financial year 2006-07 to FY 2018-19. The company had earlier paid Rs 2,500 crore on 17 February, 2020, and Rs 1,000 crore on February 20 towards AGR liabilities. Early this month, the government said it received Rs 15,896.5 crore payment from telecom companies towards AGR liabilities, placing the remaining dues at Rs 1,30,440.4 crore.
Supreme Court Order On #AGR Case | We do not appreciate actions of telecom companies, we will hold MDs personally accountable pic.twitter.com/9Gdj6VX3xI
— CNBC-TV18 (@CNBCTV18Live) March 18, 2020
Impact Shorts
More ShortsDetailing out payments made by telecom companies to the DoT towards statutory dues, Minister of State for Communications, Sanjay Dhotre informed the Lok Sabha against the provisional total dues of Rs 1,46,336.9 crore, payment to the tune of Rs 15,896.5 crore have been received. The balance dues are about Rs 1,30,440.47 crore, the minister said. However, the number does not appear to reflect the latest tranche of payment made by Bharti Airtel on 29 February. It has placed Bharti Airtel’s payments (including Telenor) at Rs 10,000 crore, with balance dues at Rs 27,740 crore. As per the data available, Reliance Communication/Reliance Telecommunication have made payment of Rs 3.96 crore, with remaining dues pegged at Rs 21,135.6 crore. Giving out TSPs-wise payments and provisional balance dues, Dhotre informed that Vodafone Idea has paid Rs 3,500 crore, putting the balance dues at Rs 49,538 crore. The due amounts may be revised once AGR figures are finalised and assessments are accordingly done and also subject to C&AG Audit/Special Audit, it said. According to the information presented, Tata Group has paid Rs 2,197.3 crore, and its balance dues are at Rs 11,625 crore. In case of Reliance Jio, the payment of Rs 195.18 crore received and exceeded dues of Rs 60.52 crore, the information showed. State-owned Bharat Sanchar Nigam Ltd and Mananagar Telephone Nigam Ltd have not made any payments towards their liabilities. The balance dues of BSNL remains at Rs 4,989.4 crore and of MTNL at Rs 3,122.8 crore.
#CNBCTV18Market | Vodafone Idea recovers sharply from lows after Supreme Court says it will consider SG’s plea w.r.t payment term plan in the next hearing for #AGR dues pic.twitter.com/vyBW3Ok7T7
— CNBC-TV18 (@CNBCTV18Live) March 18, 2020
On 17 February, the Supreme Court had rejected Vodafone’s proposal to pay Rs 2,500 crore by the end of the day and Rs 1,000 crore by Friday against AGR dues, while also refusing its plea that no coercive action be taken against it. On 14 February, the top court had warned of contempt proceedings against top executives of Bharti Airtel, Vodafone-Idea and other telecom firms for failing to comply with its directive to pay an estimated Rs 1.47 lakh crore in past dues, and asked whether there was no law left in the country. The court had on 24 October last year ordered that non-telecom revenues should be included in the AGR for calculating statutory dues such as license fee and spectrum charges. The DoT calculated that Bharti Airtel, Vodafone Idea and others owe as much as Rs 1.47 lakh crore in past dues, including penalties and interest, while non-telecom firms, who had taken some licence from it, owed another Rs 2.65 lakh crore. On 16 January, a bench headed by Justice Arun Mishra dismissed petitions of telecom firms seeking review of that order saying it did not find any “justifiable reason” to entertain them. –With PTI inputs
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