Bharti Airtel is the second telecom to file a review petition with the Supreme Court on the adjusted gross revenue (AGR) issue.
The firm has requested that simple arithmetic mistakes in AGR computations be corrected. Vodafone Idea, which is in indebtedness, had filed a similar petition with the Supreme Court on August 10, 2021 asking for clarification of the SC's July 23 ruling. In July, the judge rejected telecom companies' pleas.
These occurs at such a situation where the government is embarking on a telecom rescue package. Vodafone Idea is the worst-affected company, with a debt of Rs 1.8 trillion.
Backstory:
The Supreme Court has dismissed Vodafone Idea, Tata Teleservices, and Bharti Airtel's motions for re-computation of AGR-related dues, which is a major blow.
The Supreme Court (SC) has dismissed Vodafone Idea (Vi), Bharti Airtel, and Tata Teleservices' request for recalculation of their AGR-related dues. It's a major setback for the three telecoms, particularly Vodafone Idea, which is suffering from a severe cash crunch.
On July 23, 2021 a bench consisting of Justices LN Rao and Hrishikesh Roy heard the matter. The telcos' previous appeals against the Department of Telecommunication's AGR dues demand were denied by the bench.
Following the announcement, Vodafone Idea's stock dropped more than 8%, while Bharti Airtel's price also dropped temporarily. The Supreme Court stated that there is no opportunity for re-computation, and that this has been stated at least three times previously.
Supreme Courts Verdict:
On July 19, 2021, the Supreme Court heard the appeals of Bharti Airtel, Vodafone Idea, and Tata Teleservices and postponed its decision until July 22. The decision was revealed today, however, after the hearing scheduled for yesterday was postponed at the last minute.
The Supreme Court had set the three telecom companies a 10-year deadline to pay the government their unpaid AGR dues in ten instalments. The telecoms were given till March 31, 2031 to settle the remaining AGR due payments.
During the hearing on July 19, the bench led by Justice LN Rao referred to the top court's earlier judgement in the case and stated that there can be no re-assessment of AGR-related dues.
The three telecom companies submitted a plea in January 2021, stating that the computation of overdue AGR debts had "mathematical mistakes." They further asked for a reconfiguration of the telecom regulator's fees.
Furthermore, the Supreme Court declared it obvious that AGR dues will not be recalculated. As a result, telecoms must pay their unpaid AGR dues by March 31, 2031.
