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Supreme Court - A Strict Teacher for Telcos

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wiredlife:
After asking telcos to make reasonable upfront payment and come up with a roadmap for AGR repayments in its last hearing, the SC has noted that a repayment timeline of 20 years is a very long period. SC has asked telcos to come up with a reasonable time period. For the timelines, TTSL has sought 7-10 years repayment while Bharti / VIL have sought 15 years (VIL initially requested for 20 years and later reduced the time frame). However, the government has maintained its stance for a 20-year repayment period as telcos could go bankrupt in case of an extension failure.

Furthermore, the SC has asked VIL(Vodafone Idea) to secure AGR dues payable. To this, VIL responded saying that the government could retain its INR80b GST dues w.r.t. to the AGR dues and mentioned that it has no assets except spectrum. The government has maintained that it considers spectrum as security and could auction it to secure dues, in case of payment default. In terms of amount, the SC has reiterated that there is no scope of reassessment of AGR dues and the amount calculated by the DoT would be considered as final.

The SC also raised questions on the Rs400bn dues from insolvent telcos (Reliance communications, Aircel, Tata DoCoMo, etc) and said that it would go into the bona fide of these companies to ensure that IBC is not misused to avoid government dues.

Moreover, in maintaining its harsh stance, the SC has mentioned that any proceedings to re-assess the amount would be in violation of the court and could result in contempt proceedings against the entities involved.

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