While the matter relating to adjusted gross income dues of telecom operators and non-telecom public sector undertakings have got resolved, the very same can not be stated with regards to the stand-alone Internet service providers (ISPs). These players strategy to method the Supreme Court shortly to seek relief on the lines granted to the non-telecom PSUs by the apex court as they really feel that their case is also comparable and clubbing them with the telecom operators is not fair.
The division of telecommunications has raised a total demand of about Rs 18,000- 19,000 crore as dues on a clutch of stand-alone ISPs.
Clarifying its October 2019 order relating to the definition of AGR and dues emanating as a outcome of it, the SC had in June this year told the DoT that demand notices of about Rs 4 lakh crore raised on the PSUs getting telecom licences and spectrum was a gross misuse of its earlier ruling on the matter. It had stated that the original order pertained to the telecom operators and did not apply to the PSUs and thus was “totally impermissible”. It had directed the DoT to withdraw the demand.
Quite in contrast, the apex court had in September directed the telecom operators to spend 10% of their total dues by the finish of FY21 and the balance more than the subsequent 10 years in equal installments.
Since the AGR matter was a dispute in between the telecom operators and the DoT and like the non-telecom PSUs even the ISPs have been not celebration to the case, the latter feels that no demand ought to be raised on them also.
”The DoT can charge AGR on solutions licensed by it. The complete AGR fight was in between telecom operators and DoT, and ISPs became a casualty just after the verdict was pronounced. We have been not even a celebration to the case exactly where we could have expressed our viewpoint,” an executive with an ISP, who didn’t want to be quoted, told FE.
A query sent to the Internet Service Providers Association of India (ISPAI) with regards to the matter stay unanswered till the time of going to the press.
The AGR situation was additional than 20 year old case exactly where the DoT and the telecom operators had been at loggerheads as to what sort of revenues ought to be integrated even though calculating it. The telcos felt that only revenues accruing from licensed telecom solutions ought to be integrated even though these which are non-telecom like rentals from actual estate, treasury earnings, and so on, ought to not be aspect of it. The government differed and stated that the whole income of a licensed telco ought to be aspect of AGR.
The Supreme Court in October 2019 ruled in favour of the government, stating that the whole income of a licensed telecom operator ought to kind aspect of AGR. Using this judgment, the DoT issued notices to some PSUs as effectively as standalone ISPs also. In the case of the PSUs, the core operation was not telecom but they had some kind of telecom licence and spectrum for a aspect of their operations. Since the concerned PSUs like Railways, PowerGrid, Oil India, Gail, and so on, had taken telecom licences below the name of the flagship firm rather than their telecom operations subsidiary, the DoT applied SC’s logic that their whole income (which includes of the flagship firm) ought to be taken into account for calculating the AGR.
The case of ISPs was also somewhat comparable. They do not have spectrum but have licences for giving Internet solutions and spend a licence charge primarily based on AGR. The ISP licences have been taken by organizations who had other operations as effectively like cable solutions, computer software associated activities, and so on, and they as well had taken licence in the name of the flagship organisation rather than in the name of a separate vertical designed for giving Internet solutions.