Adjusted Gross Revenue to be Paid in 10 Years

Adjusted Gross Revenue to be Paid in 10 Years

Part of: GS Prelims and GS-III- Taxation

In news

• Recently, the SC allowed telecom companies (telcos) 10 years’ time to pay their Adjusted Gross Revenue (AGR) dues to the government.

Key takeaways

• The telecom operators would make the payment of 10% of the total dues as demanded by the Department of Telecom by 31st March 2021.
• The yearly instalments would commence from 1st April, 2021 up to 31st March, 2031.
• The instalments need to be paid by 31st March every year.
• In the event of any default in making payment of annual instalments, interest would be levied as per the agreement along with penalty and interest on penalty automatically without reference to court.
• Besides, it would be punishable for contempt of court.
• Compliance with the court order should be reported by the telcos and the telecom department every year on 7th April.
• The sale of spectrum by telcos facing insolvency proceedings shall be decided by the National Company Law Tribunal (NCLT).

Important value additions

Adjusted Gross Revenue

• AGR is a fee-sharing mechanism between the government and the telcos who shifted to the ‘revenue-sharing fee’ model in 1999, from the ‘fixed license fee’ model.
• In this course, telcos are supposed to share a percentage of AGR with the government.
• The telecom sector was liberalised under the National Telecom Policy, 1994 after which licenses were issued to companies in return for a fixed license fee.