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DoT orders no coercive action on defaulting Airtel, Voda-Idea; Pradhan says non-telcos not liable

DoT orders no coercive action on defaulting Airtel, Voda-Idea; Pradhan says non-telcos not liable

On a day when the Supreme Court-mandated deadline for Bharti Airtel and Vodafone Idea to pay Rs 88,624 crore in past dues ended, the Department of Telecommunications (DoT) on Thursday decided not to take coercive action against defaulters during pendency of their appeals seeking relaxation in the apex court's order. While Bharti Airtel and Vodafone Idea did not pay the dues, billionaire Mukesh Ambani-led Reliance Jio paid Rs 195 crore to clear all outstanding against it, official sources said.

Parallelly, Oil Minister Dharmendra Pradhan said the Rs 3-lakh crore sought by the DoT from non-telecom PSUs, such as GAIL, Oil India Ltd and PowerGrid, was a result of "communication gap" as these firms are not liable to pay any dues following the Supreme Court's October 24 ruling that non-telecom revenues of telecom firms should be included for considering payments of government dues. OIL and GAIL, which were not a party to the litigation that led to the October 24 order, filed clarificatory applications in the Supreme Court.

Following the October 24 order, the DoT had sought Rs 1.47 lakh crore from Bharti Airtel, Vodafone Idea and 13 other telecom companies. Parallelly, it raised a demand of Rs 1.72 lakh crore from gas utility GAIL India Ltd, Rs 48,000 crore from Oil India Ltd, Rs 40,000 crore from PowerGrid, Rs 15,019 crore from Gujarat Narmada Valley Fertilizers and a few more demands on firms such as RailTel. Official sources said the director of the licensing finance policy (LFP) wing has issued a direction that departments concerned should not take any coercive action, until further orders, against the licensees in case they fail to comply with the Supreme Court order.

Bharti Airtel and Vodafone Idea, whose review petitions against the October 24 order was rejected by the Supreme Court last week, communicated to the DoT that they will not pay the dues by the deadline and will instead wait for the outcome of the subsequent modification petition filed seeking relaxation in payments, they said. The petition is listed for hearing in the Supreme Court next week.

Tata Communications, in which the government holds 26.12 per stake, has also made no provision for the DoT's demand of Rs 6,633 crore. "We are in discussion with the telecom ministry. We had given them our reply (on the demand raised)," Pradhan told reporters here. "Possibly because of a communication gap, the Government of India's one department has raised such demand on PSUs under another government department."

He said parallel to discussions with the DoT, the Supreme Court has been approached on the issue. The government's demand from such companies increased many times more than their net worth and the Centre asked them to go to the Supreme Court against such dues. While Oil India Ltd filed a clarificatory/ modificatory petition on Wednesday, GAIL approached the apex court on Thursday.

"Where is GAIL in core telecom business? Is PGCIL in core telecom work or does Oil India do any core telecom job," he asked. "We feel there is no liability (following the October 24 Supreme Court ruling) on these companies." Pradhan said the approach to the Supreme Court and discussions with the DoT were being conducted simultaneously.

He, however, did not say if seeking relief from the Supreme Court was limited to PSUs under his ministry filing pleas in the apex court or his ministry would also file a petition. The DoT raised the demands on the non-telecom PSUs for leasing out surplus optical fibre network that was primarily for their internal communications under NLD (National Long Distance Service) licenses or IP-1/IP-2.

The demand notices by the DoT follow the Supreme Court's October 24 order that broadened the definition of adjusted gross revenue (AGR) for telecommunications companies to include non-core operations. AGR is used as a basis for the calculation of license fees and spectrum usage charges owed to the government. GAIL, Oil India, PowerGrid and other non-telecom PSUs were not a party to this litigation. Telecom companies owe the government Rs 92,642 crore in unpaid license fee and another Rs 55,054 crore in outstanding spectrum usage charges. These liabilities arose after the Supreme Court in October held that non-telecom revenues have to be considered for calculating statutory dues.

Outstanding SUC (spectrum usage charges) dues of various telecom service providers as on October 31, 2019, added to Rs 55,054 crore. The government has directed the licensees to make the payments in accordance with the order of the Supreme Court dated October 24, 2019, and submit requisite documents within the stipulated time frame.

In the case of Bharti Airtel, the liabilities added up to nearly Rs 35,586 crore, of which Rs 21,682 crore is license fee and another Rs 13,904.01 crore is the SUC dues (not including the dues of Telenor and Tata Teleservices). In the case of Vodafone Idea, this number stands at a cumulative Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in the licence fee.

Stating that it earned a cumulative revenue of Rs 1.47 crore from the leasing of spare bandwidth capacity, OIL in its petition to the Supreme Court stated that it will have to shut down operations if it is forced to pay an amount that is twice its net worth. From gas utility GAIL, the DoT has sought Rs 1,72,655 crore in dues on IP-1 and IP-2 licences as well as internet service provider licence. In response, GAIL said it earned only Rs 35 crore from trading spare bandwidth.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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