In a major setback to Vodafone Idea, Airtel on Thursday, the Supreme Court has ordered them to pay the central government Rs 92 thousand crore. This led to a big drop in shares of telecom companies. The court has said that these companies will have to pay adjusted gross revenue (AGR). There was a long-running dispute between the Department of Telecommunications and the telecom companies regarding this issue.
Shares fell 17 percent
After the bench of Justice Mishra, Justice A A Nazir & Justice M R Shah passed the orders, the vodafone idea shares fell by 17.17 percent, bharti airtel shares also saw a dip of 6.2 percent and was traded for 338.15 INR.
There was a dispute over it
The telecom companies argued that the AGR should only include licenses and spectrum fees. At the same time, the government said that it should include other expenses besides these. In 2015, the Telecom Appellate Authority (TDSAT) had ordered that the AGR should also include user charges, rent, dividend and profits on sale of property. However, TDSAT did not include income from bad debts, foreign exchange fluctuations and junk sales. The TDSAT order was taken by both the parties to the Supreme Court.
Out of 92 thousand crores, the government was able to recover only half. The telecom sector currently owes Rs seven lakh crore.
Airtel gave a statement
Airtel has given a statement on this. The company has said that it is not happy with the Supreme Court’s decision. The AGR has been in dispute between the Department of Telecommunications and the telecom service provider since 2005.