Airtel’s own estimate puts AGR dues at 1/3 of DoT demand

NEW DELHI: Bharti Airtel’s own assessment of adjusted gross revenue (AGR) dues is nearly a third of the government’s as it has taken into account certain deductions the telecom department had initially refused and also duplicated entries, among other discrepancies, a person familiar with the matter said.“Certain deductions haven’t been allowed by the DoT (Department of Telecommunications) owing to the absence of certain documents… telcos were informed that in such a scenario, the department would go ahead and add those to revenue for the time being but would allow deductions once companies furnish the requisite documents,” the person told ET. The department’s refusal to consider these had inflated the bill by as much as seven-eight times over some years, he said.The required documents have now been submitted, and telcos such as Airtel and Tata Teleservices hope the DoT would lower its assessed AGR liabilities comprising licence fees, spectrum usage charge (SUC), interest and penalties, the person added. Licence fees and SUC are paid on the basis of a telco’s AGR.But as things stand, since the interest and penalty have been compounded by the government by taking such “disputed” heads into account, the DoT’s figures have increased manifold in comparison to the company’s estimates, the person said.Another person said the biggest discrepancy for both Airtel and Tata Teleservices was because the DoT had not permitted some deductions on interconnect usage charge in the absence of certain documents.The people said the original liability — as calculated by both the DoT and Airtel — had been amplified several times due to the high interest rates and calculations spread over several years. So for example, while dues for 2006-2007 as calculated by the DoT had grown 7-8 times the original liabilities, Airtel's self-assessed dues, despite the amplification over the years, was still far lower. This is due to variance in the principal arrears for 2006-2007 owing to the discrepancies in calculating AGR, they said.The difference between the original liability and the final one though varies, depending on how old the issue is and the rate of interest applicable for those years. Typically, older the base year, the wider the gap between the original liability and the final one.“Besides, penalty on the original amount is as much as 50%,” the first person added.Airtel has self-assessed its AGR dues at Rs 13,004 crore, compared with nearly Rs 40,000 crore as calculated by the DoT. Tata Teleservices’ own estimate is Rs 2,197 crore against the government’s demand of nearly Rs 15,000 crore. Both Airtel and Tata Teleservices have paid their dues in full, as per their selfassessment.Airtel did not respond to ET’s queries. Tata Teleservices and the DoT couldn't be immediately reached for comment.In fact, Airtel on Saturday also paid Rs 5,000 crore as “ad-hoc payment”, subject to refund at a later stage after the DoT reconciles its own estimates with that of the telco.Vodafone Idea, which has so far paid Rs 3,500 crore towards its AGR dues, has estimated its liabilities at around Rs 23,000 crore, of which Rs 7,000 crore is the principal. This compared with DoT’s Rs 57,000-crore estimate.74450179 As reported by ET on February 28, in certain cases, the controller of communications accounts (CCA) of the DoT had not permitted certain deductions, citing inadequate supporting documents such as invoices.Also, the CCA had not taken a consistent stand across circles on the interpretation of certain DoT circulars.This has resulted in anomalies such as double addition of revenue in some circles, while in other circles, amounts running into hundreds of crores have been added to the revenue without any explanation, ET had reported.Telcos are likely to go to the Telecom Disputes Settlement and Appellate Tribunal if the DoT is not convinced and continues to press for more than the self-assessed dues of the telecom operators, industry executives had said.

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