In a serious blow to telecom majors Bharti Airtel and Vodafone Idea, the Supreme Court on Thursday dominated that the prevailing definition of Adjusted Gross Revenue (AGR) will prevail. This implies that the 2 telecom suppliers will now have to pay Rs 50,000 crore to the Department of Telecommunications (DoT).
The concern had been dragging for the previous 14 years with the telecom suppliers and DoT locked in battle over the definition of AGR. While the telecom suppliers insisted that AGR solely included income from core operations, DoT maintained that AGR additionally included income from operations, apart from core ones.
AGR assumes significance as a result of it’s the foundation on which the DoT calculates levies payable by operators. Telecom firms pay 3-5% and eight% of the AGR as spectrum utilization prices and licence charges, respectively, to DoT.