Vodafone Idea shares rose nearly 10% on October 27 after Centre said it is willing to reconsider the telco's request in AGR case and Supreme Court allowed Union to take a decision as it is in the policy domain.
"No reason why Centre should be prevented from reconsidering the issue," said the apex court bench comprising Chief Justice B R Gavai and Justices K Vinod Chandran and Vipul M Pancholi.
On October 27, Vodafone Idea shares on NSE hit one-year high of Rs 10.57 on intraday basis by climbing nearly 10%. However, profit booking pulled the stock from its highs and it closed 4% higher at Rs 10.02.
Appearing for the government, Solicitor General of India Tushar Mehta had said that due to the change in circumstances, as the Centre had acquired 49% equity of Vodafone Idea and almost 20 crore customers were using the telecom operator's service, the Union was willing to examine the issues raised by the petitioner.
"Taking into the consideration the status of the case now, the government has infused substantial equity into the company and that it will have direct bearing on 20 crore customers, we see no issue in the Union reconsidering the issue and taking appropriate steps," said a bench led by CJI BR Gavai.
In what could be a rub off effect, Indus Tower and Bharti Airtel shares were trading 5% and nearly 3% higher, respectively, on October 27.
Adjusted gross revenue is the income figure used to calculate the licence fees and spectrum charges that telecom companies must pay to the government.
"In a positive development, the Hon’ble Supreme Court has today permitted the Government to consider the grievances of Vodafone Idea Limited on the issues relating to AGR. We look forward to working closely with the Department of Telecommunications to resolve this matter in the interests of our nearly 200 million (20 crore) subscribers. This is an impetus to the Digital India vision and ambition of our Honourable Prime Minister," said Vodafone Idea in a stock exchange filing.
The hearing on the petition has been adjourned in the past on several occasions at the request of the telecom firm and Solicitor General Tushar Mehta, appearing for the Centre.
VIL has filed a fresh plea against the DoT's demand of Rs 5,606 crore relating to 2016-17.
Earlier, the Centre said that efforts were underway to arrive at a resolution with the company.
Mehta said the government held nearly 50 per cent equity in Vodafone Idea, making it a direct stakeholder in the operator's survival.
"Some solution may have to be found out, subject to your lordship's approval...," the law officer had said.
VIL has sought a direction to the DoT to "comprehensively re-assess and reconcile all AGR dues for the period up to FY 2016-17 following the 'Deduction Verification Guidelines'" dated February 3, 2020.
Earlier this year, in a setback to telecom majors, including Bharti Airtel and Vodafone Idea, the apex court refused to review its 2021 order rejecting their pleas for rectification of alleged errors in the calculation of AGR dues payable by them.
The telecom companies argued that arithmetical errors in the calculation should be rectified and that there were cases of duplication of entries.
In September 2020, the top court fixed a time frame of 10 years for telecom service providers struggling to pay Rs 93,520 crore of AGR-related dues to clear their outstanding amount to the government.
It said telecom operators should pay 10 per cent of the total dues as demanded by the DoT by March 31, 2021, and the remaining amount would be paid in yearly installments from April 1, 2021, to March 31, 2031.
The top court, which held the demand raised by the DoT with respect to AGR dues as final, said there should neither be a dispute raised by the telecom companies nor any re-assessment.
The apex court delivered its verdict on the AGR issue in October 2019.
The DoT moved a plea in the top court seeking staggered payment of the dues by telcos over 20 years.
Earlier, AGR included both telecom revenue and non-telecom income (like interest from deposits or asset sales).
In 2021, the rules were relaxed to exclude non-telecom income of AGR, reducing the financial load on operators.
With inputs from PTI
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