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SC warns against AGR dues’ Reassessment

SC warns against AGR dues’ Reassessment:

SC warns against AGR dues’ reassessment

What is AGR?

  • Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
  • It is divided into spectrum usage charges and licensing fees, pegged between 3-5 per cent and 8 per cent respectively.

Issue:

  • The Bench observed that 15 or 20 years was not a reasonable time period and the telcos must come forward with an appropriate time frame.
  • The Centre had earlier urged the court that up to 20 years be given to the firms for the payments.
  • The telcos said they were in no position to give fresh bank guarantees for the payments.

Significance:

  • The definition of AGR has been under litigation for 14 years.
  • While telecom companies argued that it should comprise revenue from telecom services, the DoT’s stand was that the AGR should include all revenue earned by an operator, including that from non-core telecom operations.
  • The AGR directly impacts the outgo from the pockets of telcos to the DoT as it is used to calculate the levies payable by operators.