The Supreme Court of India today (January 21, 2020) has said that it would hear Vodafone-Idea and Bharti Airtel's plea next week for the modification of its 24 October, 2019 order for payment of dues and interest in the amount of Rs. 92,000 crores within three months.
The companies had moved the Supreme Court on 20 January, 2020 against the impugned order.
A full bench of the Supreme Court comprising of Justice Arun Mishra, Justice S. A. Nazeer and Justice M.R. Shah rejected the review petition by Airtel, Vodafone-Idea against AGR verdict on INR 92,000 crores, past dues on 16 January, 2020 in closed chambers. The matter pertains to the Department of Telecommunication or DoT’s claim that the companies had underreported their revenues, as a result paying less tax to the government.
The case has been ongoing for 14 years now. Tata Teleservices and Hughes Communication India have also filed a review petition. There is an ongoing merger between Tata Teleservices and Bharti Airtel, which is opposed by Department of Telecommunication (DoT).
As per standard accounting practice, companies have to make provisions for such claims. As per estimates, Airtel owes about INR 21,682 crores while Vodafone Idea owes a much hefty amount of INR 28,308 crores. The provisions made by the telecom companies are far short of the actual amount due.
The telecom companies have argued that such a timeline would disrupt the entire industry and come in way of the government’s scheme such as Make in India and Digital India. They want a new timeline to be set up for the payments to be made so that the market is not affected.
“Payment of thousands of crores in due amounts without proper assessment and financial calculations and time for payment will not only cause irreparable damage to the appellants (telcos) but also to the telecom industry, leading to possible disruption of a public utility service owing to the bad financial position of the telecom companies,” they appealed.
Author: Nandini Gandhi