OF DoT, TELECOM TIGERS, REVENUE SHARING & HON SUPREME COURT RULING

The Government should be well advised not to fall into the vortex and enforce the law of the land to protect the taxpayers’ and exchequer’s money and in compliance with the Hon’ble Supreme Court Judgment, Central Government must recover its dues within the time specified by the Hon’ble Supreme Court

When the Hon. Supreme Court on 24th October, 2019 upheld the stand taken by the Department of Telecommunications (“DoT”) in a long protracted legal battle for payment of Dues to the Government in terms of “License Fee (LF) & Spectrum Usage Charge (SUC)”, it finally set to rest all contentions and counter-contentions surrounding outstanding dues and liabilities of telecom service providers (TSPs) to the Government. These liabilities till 2016-17 comes to around ₹50000 crores for Airtel and ₹40000 crores for Vodafone-Idea Ltd with more liability of erstwhile Vodafone group of companies. In case of Airtel, around ₹13000 crores are liability of Tatas and Telenor which is covered by a back-to-back agreement with them at the time of merger. There must be similar agreement of Vodafone group of companies with Idea as well. In fact, the gross revenues in the case of Airtel stands at about ₹735000 crores for the financial year 2010-11 to 2018-19 alone, against which it had to pay approximately ₹90000 crores, a substantial part of which remains unpaid.

Some interesting observations of the Hon’ble Court need to be highlighted here to understand the unfolding of events prior to 24th October, 2019 and thereafter.

“189. Further, the conduct of the licensees has also to be considered in the backdrop of the fact that the regime of revenue sharing was extremely beneficial than the previous regime of the fixed license fee, and they have tremendously benefited by it as is apparent from the statistics of the revenue earned under the revenue sharing regime. When Government has parted with the privilege as to revenue on sharing basis under the license, and an agreement entered into, it ought to have been precisely followed…”