The Supreme Court on Tuesday gave telecommunications companies 10 years to pay adjusted gross revenue dues to the government, Live Law reported. However, 10% of the dues have to be paid by March 31, 2021, the court said.
Justice Arun Mishra said that the telecom firms must pay the dues in annual installments commencing from April 1, 2021, till March 31, 2031. The firms must also keep alive the adjusting bank guarantees until the payments are made.
“In case of any default in making payment of annual installments, interest would become payable as per agreement along with the penalty and interest on penalty and would be punishable by contempt of court,” the court held. On whether spectrum can be a subject matter of the process of resolution, the court said it has asked the National Company Law Tribunal to decide the matter.
The Supreme Court also dropped contempt cases against the telecom companies and ordered their managing directors to give personal guarantees within four weeks, NDTV reported.
The Supreme Court will direct the government on how to recover dues from the defunct Reliance Communications Limited, Aircel Group and Videocon Telecommunications Limited under the Insolvency and Bankruptcy Code. At present, the spectrum these companies hold is being used by Reliance Jio and Airtel. The court has asked why firms that use radio waves of bankrupt companies should not be made to pay adjusted gross revenue dues.
The case so far
In March, the Department of Telecommunications had appealed to the top court seeking 20 years for payment of adjusted gross revenue dues. This came after telecommunications firms expressed their inability to pay according to the Supreme Court judgement last October.
In October, the Supreme Court had asked telecom operators to pay tax on their non-core revenues over and above the spectrum usage charges and licence fees. It upheld the Centre’s broader definition of revenue, based on which the government calculates levies on telecom operators. Airtel and Vodafone Idea faced a combined liability of Rs 82,000 crore following the Supreme Court ruling.
The court, however, seemed less inclined to grant 20 years to the telecom firms. In response, Vodafone Idea and Airtel sought 15 years, and Tata Teleservices seven to 10 years. On August 25, the court said it may cancel spectrum allocation to telecom companies if they are unwilling to pay their dues.