The Centre on Thursday informed the Supreme Court that the Department of Telecommunications (DoT) has decided to withdraw 96 per cent of the Rs 4 lakh crore demand for AGR related dues raised against non-telecom PSUs like GAIL.
The top court also said that private telecom companies including Bharti Airtel, Vodafone Idea must come out with a 'reasonable payment plan' and asked them to file their books of accounts for the last 10 years.
It then fixed the AGR (adjusted gross revenue) dues case for further consideration in the third week of July. Telecom firms have to pay AGR related dues along with interest and penalty -- an estimated to be around Rs 1.6 lakh crore.
A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah was informed by Solicitor General Tushar Mehta that the DoT has filed an affidavit explaining the reasons for having raised the demand against the PSUs.
He said the decision to now withdraw 96 per cent of the demand is taken keeping in mind that these firms are not on the business of providing telecom services.
The top court had on June 11 slammed the DoT for raising the AGR related huge demand from non-telecom PSUs and had asked it to reconsider the move, saying that using its earlier verdict on the issue to do so was "totally impermissible".
Senior advocate Mukul Rohatgi, appearing for Vodafone Idea, said that it has already paid Rs 7,000 crore to the DoT, but presently keeping in mind the "precarious" financial condition, it was not in a position to furnish any bank guarantee.
The "ship was barely afloat" and the telecom firm was not making profits for several quarters, Rohatgi said, adding that it already has Rs 15,000 crore in guarantees for spectrum licence with the government.
Senior advocate Abhishek Manu Singhvi, appearing for Bharti Airtel, said that the company and the DoT will have to decide on calculation of dues.
DoT sought time from the bench, hearing the matter through video-conferencing, to respond to the affidavits filed by private telecom companies, including Bharti Airtel and Vodafone Idea Ltd, on payment of their dues based on the AGR.
During the hearing, the bench asked about the security and guarantees which can be sought from telecom companies to ensure payment of the dues.
The bench observed that during the ongoing COVID-19 pandemic, telecom is the sector which is making money and they should deposit some money as the government needs it to deal with the situation.
Besides asking the DoT to reconsider the demands raised against PSUs, the top court had earlier also asked telecom firms to file affidavit explaining the time needed by them to clear the remaining statutory dues that arose from the court's verdict, which included non-telecom revenues in the definition of AGR for calculating the amount due to the government.
The bench had also asked the government about the guarantees that can be sought to ensure telecom companies abide by a time frame and payment schedule.
Following the apex court's October 2019 verdict on the AGR to be used for calculating government dues such as licence fee and spectrum charges, the DoT had sought Rs 4 lakh crore in past dues from gas utility GAIL India Ltd, electricity transmission firm PowerGrid, Oil India Ltd, Delhi Metro and others.
The state-owned firms challenged the demand, saying telecom was not their core business and revenue from licences such as ISP formed a meagre part of their revenue.