Supreme Court gives telecom firms 10 years to pay AGR dues to government, 1st instalment of 10% by March 2021

The Supreme Court on Tuesday granted telecom companies, including Airtel Bharti and Vodafone Idea, a period of 10 years to clear their pending adjusted gross revenue (AGR) dues to the Central government. The Court also directed them to deposit the first installment of 10% by March 31, 2021.

A three-judge bench headed by Justice Arun Mishra, passing the order through video conferencing, asked the National Company Law Tribunal (NCLT) to decide on spectrum trading as part of the Insolvency and Bankruptcy Code. They said that the installments should be paid by February 7 of every succeeding year.

The apex court also warned the telecom companies that if there was any default, then it would accrue interest, and also non-payment would invite contempt of court proceedings against the firms.

The top court had, on July 20, reserved its order on the timeline for the payment of AGR dues by telecom companies after observing that the request of telecom companies seeking 15 to 20 years for the payment of AGR dues in a staggered manner was unreasonable.

The bench was hearing a petition filed by the Central government through the Department of Telecommunication seeking the approval of a formula allowing telecom service providers to make annual installments of unpaid or remaining AGR dues in the next 20 years or more.

The plea said if the telecom companies face proceedings under the Insolvency and Bankruptcy Code, it will have adverse impacts on competition and service in the telecom sector.

The telecom companies, during the hearing, had also sought a period of 15-20 years for the repayment of AGR dues.

On February 14, the Supreme Court had directed telecom companies to pay the AGR-related liabilities to the government by March 17.

Thereafter, the telecom companies had partly or fully paid their self-assessed AGR dues to the Central government. 

(With agency inputs)