Breaking: Government interpretation on scope of “Adjusted Gross Revenue” to prevail, Supreme Court
News

Breaking: Government interpretation on scope of “Adjusted Gross Revenue” to prevail, Supreme Court

Murali Krishnan

In a blow to Telecom Operators in the country, the Supreme Court today agreed to the Department of Telecom’s (DoT) interpretation of “Adjusted Gross Revenue”. It, therefore, allowed the appeals filed by the DoT against TDSAT order and dismissed the appeals filed by Telecom operators.

A Bench of Justices Arun Mishra, S Abdul Nazeer, and MR Shah held that most of the revenues “except one or two” as pointed out by DoT will fall within the net of AGR.

The issue of Adjusted Gross Revenue is a crucial one for Telecom Operators and this judgment will have major financial implications on various telecom companies including Airtel and Vodafone Idea.

The scope of AGR affects the Spectrum Usage Charges and License Fees which are to be paid by the operators to the government. As an outcome of this judgment, the telecom companies might have to cough up Rs. 92,000 crore as license fees.

While the telecom operators maintained that AGR should be calculated based on revenue from Telecom services, the Department of Telecom has disputed the same and have sought to include all revenues accruing to telecom operators.

TDSAT in its judgment had excluded the following from the definition of AGR: capital receipts, bad debt, distribution margins to dealers, forex fluctuations, sale of scrap and waiver of late fee. However, it also held that revenue from non-core sources such as rent, profit on the sale of fixed assets, dividend, interest, and miscellaneous income must be included while computing AGR.

The Central government and telecom companies had appealed this verdict to the Supreme Court.

[Read Judgment]

Adjusted-Gross-Revenue-judgment.pdf
Preview
Bar and Bench - Indian Legal news
www.barandbench.com