SC Allows Centre to Reassess AGR Dues for Vi
In a major relief for Vodafone Idea Ltd (Vi), the Supreme Court of India has permitted the Central government to reconsider its demand for Adjusted Gross Revenue (AGR) dues exceeding Rs 5,000 crore. This decision is significant as it comes after the government acquired a 49% stake in the telecom operator, which serves a vast customer base of 20 crore users.
The Supreme Court, led by Chief Justice B R Gavai and Justice Vinod Chandran, acknowledged the change in circumstances presented by the government. Vi had previously approached the court, arguing that the additional AGR demands for the financial year 2016-17 had already been settled and should not be reopened.
During the proceedings, Solicitor General Tushar Mehta highlighted the government's substantial investment in Vi and its commitment to reconsider the AGR dues in light of the new equity stake. The court noted that such a reconsideration would be in the best interests of the millions of users relying on Vi's services.
The Supreme Court’s order emphasized that the matter falls within the policy domain of the Union Government. The court expressed no objections to the government’s willingness to re-evaluate the situation, particularly given the substantial equity infusion and the implications for the customer base.
This development is crucial in the context of the ongoing disputes regarding AGR dues, which have troubled the telecom sector since 2003. In previous rulings, the Supreme Court upheld the Department of Telecommunications' stance on what constitutes AGR and mandated the collection of significant dues from telecom companies.
In 2020, the court allowed telecom companies to spread their AGR payments over ten years. However, it dismissed various pleas from companies seeking waivers on interest and penalties related to these dues. The recent ruling opens a new chapter in the ongoing saga of telecom regulations in India, potentially easing the financial burden on Vi and affecting its operational stability.
As the government reevaluates its position on the AGR dues, the outcome will likely have a profound impact on the telecom industry and its customers. The Supreme Court’s encouragement for a reconsideration reflects a balancing act between regulatory frameworks and the financial viability of telecom operators in India.
