Telcos Will Have to Pay Rs 92,000 Crore to Government as SC Rules on AGR Definition

There has been a long-ongoing tussle between the government and the telecom operators about the definition of Adjusted Gross Revenue (AGR). Now there has come a final verdict from the Supreme Court on this matter, and as reported by ET Telecom, the apex court has ruled in favour of the government. But, this has far-reaching implications for the telecom sector and the companies who are already financially burdened. The legal tussle on AGR between the telecom operators has been persisting in the industry for more than 14 years. But, finally Supreme Court put an end to the battle, but the chips have not fallen in favour of the telecom operators. As now they will have to shell out a massive amount as part of AGR in the name of license fees and other charges asked by the government. Here is what the new decision entails.

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Tussle Between Telecom Companies and the Government

The bench of Supreme Court which was led by Justice Arun Mishra, A.A. Nazeer and M.R Shah, gave the ruling on the matter. As per the ongoing matter, the telecom operators had been fighting for the definition of AGR saying that the AGR should constitute of the revenue which comes from the telecom services only and not all the auxiliary services that the telecom operators provide. The telcos wanted that the license fees, and spectrum usage charges (SUC) should be calculated on the AGR, which is considered to come only from the core telecom services and not the non-core services. However, the government had different opinions and was stuck on the issue that the AGR should be calculated, keeping in mind the entire revenue that the telecom operator generates, including non-core services as well. This is what the Supreme Court has now ruled in favour of.