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SC AGR Judgement Update: Airtel AGR Dues Lesser Than Demanded by Government, As Per Self-Assessment

Professor of Financial Economics and Part-time Value Investor, Transfin.
Mar 5, 2020 7:24 AM 2 min read

The Supreme Court of India (SC) on October 24th 2019 gave its Adjusted Gross Revenue (AGR) judgement and said that the definition of Adjusted Gross Revenue (AGR) includes all revenues as announced by the Department of Telecommunications (DoT).


The telecom companies' liabilities, including interest and penalties, was estimated at 1.3Lcr. Of this, Airtel AGR dues stood at ₹40,000cr ($5,516m), while Vodafone Idea AGR dues were pegged at ₹53,000cr. 


It was widely expected that several companies could file for bankruptcy considering the huge amounts they owe to the government, especially Vodafone Idea, which has been posting losses in its quarterly results for some time now.  


The SC had set January 23rd as the deadline for settling all AGR dues. However, except Reliance Jio, no other telecom company paid any dues to the Government. The final notice for clearing the AGR dues was issued to the remaining telecom companies on February 14th. The companies were expected to clear the AGR dues by 17th February.


However, as per a self-assessment of AGR dues by telecom companies, they owe the Government much lesser than what it has demanded. For instance, Bharti Airtel has pegged the AGR dues it owes the Government at ₹13,000cr ($1,800m) and does not see them exceeding ₹18,000cr ($2,493m). 


This is almost half the amount (₹35,300cr ($4,889m)) of adjusted gross revenue demanded by the Government.


It is rather interesting to note here that the news comes shortly after Tata Teleservices said that it owed only a fraction (₹2,197cr ($304m)) of the ₹14,000cr ($1,939m) the Government is demanding.


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