In a decisive move, the Supreme Court on Monday dismissed petitions filed by major telecom operators Bharti Airtel, Vodafone Idea, and Tata Teleservices seeking relief from their outstanding Adjusted Gross Revenue (AGR) liabilities, amounting to over ₹40,000 crore in interest, penalties, and related dues.
A Bench led by the Supreme Court reaffirmed the binding nature of its earlier rulings on AGR, emphasizing that no reconsideration or reassessment of the dues would be entertained.
Background: AGR Dispute and Earlier Rulings
The pleas from the telecom companies were the latest in a series of legal efforts aimed at reducing their massive statutory liabilities under the AGR framework. These liabilities arose from a long-standing dispute with the Department of Telecommunications (DoT) over the definition and calculation of AGR, which forms the basis for calculating licensing and spectrum usage fees.
In October 2019, the Supreme Court had ruled in favour of the government’s interpretation of AGR, which includes revenues from all sources such as installation charges, handset sales, roaming charges, and even interest and dividend income. The total dues, including interest and penalties, were estimated to be over ₹92,000 crore across telecom service providers (TSPs).
The Court had observed that the telecom sector had extensively benefited from the liberalised revenue-sharing regime introduced by the government and had subsequently evaded payment of rightful licence fees.
“The sector has benefited immensely under the scheme as apparent from the gross revenue trend from 2004 to 2015… The telecom service providers in spite of the financial benefits of the package started to ensure that they do not pay the licence fee to the public exchequer based on an agreed AGR,” the 2019 judgment noted.
Curative Pleas and Fresh Relief Demands Dismissed
After the dismissal of review and curative petitions in 2023 and 2024, the telecom companies once again approached the Supreme Court pleading for relief on grounds of equity and economic strain, and invoked Article 14 of the Constitution to assert their right to equal treatment. They sought waivers on the interest, penalty, and interest on penalty components of the AGR dues.
However, the Court rejected these arguments, citing the finality of its earlier decisions. It reiterated its July 2020 position that no dispute could be raised regarding the calculation of AGR dues by the government and that there was no scope for reassessment.
“No telecom operator shall raise any dispute in respect of the demand raised by the Department of Telecommunications pertaining to AGR dues, based on the judgment of this court of October 24, 2019,” the bench reiterated, underlining that such attempts were contrary to its directions.
Payment Timeline Remains Unchanged
As per the Supreme Court’s order dated September 2020, telecom companies are required to clear their AGR dues in annual instalments of 10% starting from April 1, 2021, with the last instalment due by March 31, 2031. This timeline remains unchanged following today’s dismissal.
