Budget 2020

Budget 2020: Govt. not expecting substantial gain from AGR dues in 2020-21

Industry players in dialogue with government to resolve the issue: Minister

It may have sought almost ₹4 lakh crore from telecom and non-telecom companies in past dues but the government is not expecting any substantial windfall in the coming year.

Finance Minister Nirmala Sitharaman, who provisioned ₹1.3 lakh crore in receipts from telecom licence fee and spectrum usage charge for the next financial year, said the government is looking to address the dispute over what revenues should be taken for calculating dues in a more comprehensive manner.

In her post-Budget press conference, she said the issue is a complex one and the industry players are in dialogue with the government to resolve it.

“I don’t think I am looking at it purely from what the government will collect. This particular development in the telecom sector is something which all of us have watched, going through the proceedings of the court... it would not be right for me to just comment and say we are looking at this number or that,” she said to a question on enhancing revenue collection target from the debt-ridden telecom sector.

The government on Saturday increased the revenue estimate from the sector by over two-folds to ₹1.33 lakh crore for 2020-21 as compared to the collection target in the current financial year, mainly on account of adjusted gross revenue dues.

“It is fairly complex issue. The industry and affected parties are also in touch with the government. We are engaging with them, the department is engaging with them. We will be addressing this in a more comprehensive manner,” Ms. Sitharaman said.

The government expects ₹58,686.64 crore under communications head in the current financial year as against a budgeted amount of ₹50,519.8 crore in 2019-20.

“Receipts under ‘Other Communication Services’ mainly relate to the licence fees from telecom operators and receipts on account of spectrum usage charges,” the Budget documents said.

The industry is saddled with ₹1.47 lakh crore in additional statutory dues in the wake of a recent Supreme Court ruling on adjusted gross revenue (AGR). Telecom companies owe the government ₹92,642 crore in unpaid licence fee and another ₹55,054 crore in outstanding spectrum usage charges.

The dues of non-telecom public sector firms, including Oil India, GAIL and PowerGrid, as per the demand raised by the Department of Telecommunications, exceed ₹2.4 lakh crore.

ICRA Assistant Vice-President (Corporate Ratings) Ankit Jain said despite deferral of spectrum payments due in the financial year 2020-21 and financial year 2021-22, higher budgetary estimates for 2020-21 can be attributable to some participation in 5G spectrum auctions and expectation of payments of AGR-related dues.

According to government data, the liabilities in the case of Bharti Airtel add up to nearly ₹35,586 crore, of which ₹21,682 crore is licence fee and another ₹13,904.01 crore is the SUC dues (excluding the dues of Telenor and Tata Teleservices).

In the case of Vodafone Idea, this number stands at a cumulative ₹53,038 crore, including ₹24,729 crore of SUC dues and ₹28,309 crore in licence fee.

The remaining liability is with state-owned BSNL and MTNL and some of the shut or bankrupt telecom companies.

The Supreme Court had allowed three months to the affected operators to cough up the amounts — whose deadline expired on January 23 — though the DoT did not take any coercive action against defaulters as their appeals seeking relaxation in payment timelines in pending in the apex court’s order.

Bharti Airtel, Vodafone Idea Ltd and Tata Teleservices have jointly filed a modification application in the Supreme Court seeking more time to pay the statutory dues.

The fresh plea for relief on the payment schedule came after the Supreme Court last month dismissed the review petitions filed by telecom companies against the apex court’s October 24, 2019, verdict.

The DoT is also working on spectrum auction, which is likely to be held in April-May 2020.

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Printable version | Feb 22, 2020 7:06:35 AM | https://www.thehindu.com/business/budget/budget-2020-govt-not-expecting-substantial-gain-from-agr-dues-in-2020-21/article30714954.ece

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