DoT asks circle officers to complete AGR rechecks by Dec 20

The telecom department has asked its circle level offices to complete reassessment of Adjusted Gross Revenue or AGR basis the Supreme Court judgment by December 20, 2019, beginning the formal process of collecting license fees and spectrum usage charges based on AGR, that have been pending for more than a decade.

The circle offices have started issuing directions to carriers to submit their audited assessments of AGR for FY 2018-19 and for all financial years since the beginning of their license period till FY 2018-19, by November 28, as per notices seen by ET.

“As this task is time bound and compliance is to be reported to the Hon’ble Supreme Court, you are instructed to follow above instructions within the time frame specified failing which action in terms of the Licence Agreement will be initiated,” a notice from Kerala circle’s controller of communication accounts has directed.

The circle level offices of the DoT had in August directed all licensees including ISPs to remit all pending payments from the date of signing of license agreement till first quarter of FY 2019-20 within September 15, 2019.

They were also told to ensure that the financial bank guarantee which is held by DoT shall be equivalent to license fee for two quarters and other dues not otherwise securitized, “failing which action including encashment of Bank guarantees as per terms of licence agreement will be initiated.”

The instructions follow DoT’s Wednesday move where it took the first official step towards realising additional AGR dues after the October 24 apex court order, by issuing notices to all telcos, ISPs, virtual network operators and their associations to pay up and submit compliance documents within three months of the ruling, as mandated by the court.

“It is the responsibility of the licensees to pay the licence fee and other dues after carrying out their own assessment as prescribed in the licence agreement,” DoT said in the notice.

As per DoT’s calculations submitted to the SC in mid-July, 15 telcos owe almost Rs 93,000 crore in licence fees, penalties and interest. Additionally, telcos owe over Rs 41,000 crore in spectrum usage charges. This is likely to rise by about 10% or more after recalculations, officials had earlier told ET.

The Supreme Court ruled in favour of the DoT and upheld the definition of AGR to include non-core sources of revenue such as rent, profit on sale of fixed assets, dividend, interest and miscellaneous income, ending an almost 16-year dispute with the telcos. Licence fees and spectrum usage charges are calculated as a percentage of AGR.

Bharti Airtel and Vodafone Idea, which are due to report their quarterly results today, are set to file review petitions in the SC against the AGR order.