AGR dues: Vodafone Idea on the brink as DoT may revoke bank guarantees

Solicitor General’s view sought after SC refuses relief; telcos pay a fraction of the total AGR dues

In a day of twists and turns, the government received Rs 14,697 crore from three companies out of the telecom sector’s total dues linked to adjusted gross revenue (AGR) estimated at Rs 1.47 trillion, even as the Supreme Court dismissed Vodafone Idea’s plea seeking relief from revocation of its bank guarantee.

Not leaving anything to chance, the Department of Telecommunications (DoT) has sought legal opinion including that of Solicitor General Tushar Mehta on whether to revoke bank guarantees of companies in case they fail to pay their full AGR dues before the next date of hearing on March 17. Any move to revoke or encash the bank guarantee would put the operation of highly-stressed Vodafone Idea at risk.

The firm has maintained that without a relief on the AGR payout, it may not be possible to continue as a going concern. Also, according to a CNBC-TV18 report, Voda Idea has written to the DoT and the Income Tax Department, seeking adjustment of its AGR dues against a Rs 7,000-crore pending tax refund related to an earlier SC judgement that Vodafone-Hutchison deal was not taxable in India…

AGR verdict: Data could be the new Onion, Mr Ravi Shankar Prasad

The need of the hour could be to let Vodafone-Idea continue with the business providing them an extended rope to make the payments over a period of time, than to kill the “goose”

Economy News: The Hon. Preeminent Court on Friday rapped the telecom administrators and requested them to pay the balanced gross income (AGR) contribution by the stroke of 12 PM on Friday. This is likened to an “Execution order” for Vodafone-Idea. The legitimate framework needs to observe the standard book and is bound by law. In any case, it’s the official which needs to “think and react quickly” and make sense of the best answer for this circumstance from a comprehensive perspective, versus nailing a “guilty party”.

Everyone’s eyes would be on the Telecom Minister, Mr. Ravi Shankar Prasad, who should think “out-of-the-container” than take the simple way of toeing the Hon. Court’s order. Before closing Vodafone-Idea, the Telecom Minister should make sense of how to recuperate AGR duty from the cadavers of telecom division, viz. Dependence Communication (RCom), Aircel, Telenor, Sistema and Videocon. Not every person accompanies a rich family like the Tatas, who are satisfying off obligations of Tata Teleservices through the parent Tata Sons.

Presently, here is the thing that would occur if Vodafone-Idea were to close shop:

– Non-recuperation of contribution: It will invalidate the very point of AGR, transforming this imbroglio into a since a long time ago drawn procedure with no lucidity on conclusion.

– Job misfortunes: About 14,000 representatives, alongside various other people who are legitimately reliant on Vodafone-Idea as easygoing specialists, sellers, specialist organizations and so forth will endure.

– Non-performing resources (NPAs): Nearly Rs 1.15 trillion could turn NPA. This could be another IL&FS-type occasion. In contrast to different NPAs, the purported “resources” of a telecom organization can vanish in slim air the day it closes down. Moreover, who might bear the duty taking care of home advances, individual advances and so forth of the workers?..