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Adjusted Gross Revenue (AGR) Case
Context
The Supreme Court dismissed fresh pleas by telecom companies seeking relief in the payment of Adjusted Gross Revenue (AGR) dues, reaffirming its earlier judgments and stating that no reassessment of dues would be allowed.
What is AGR?
- Adjusted Gross Revenue (AGR) is the base of revenue on which telecom companies pay license fees (8%) and spectrum usage charges (3-5%) to the Department of Telecommunications (DoT).
- As per DoT, AGR includes all revenues (core + non-core like handset sales, interest income).
- Telecom operators argued AGR should only include core telecom revenue.
- In 2019, the Supreme Court expanded the definition of AGR and included all revenues earned by telecom companies, including non-core income like rent from infrastructure and interest, which massively increased the dues for companies in the sector like Vodafone Idea and Bharti Airtel.
- Following this move, the total dues that were expected to be paid by the telecom industry to DoT were reported at over Rs 1.47 lakh crore. The court set a repayment timeline of 10 years and rejected telecom companies’ requests for longer periods or reductions in the amount paid.
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