Adjusted Gross Revenue
What is it?
- Telecom operators are required to pay licence fee and spectrum charges in the form of ‘revenue share’ to the Centre. The revenue amount used to calculate this revenue share is termed as the Adjusted Gross Revenue (AGR).
- According to the Department of Telecommunications’ (DoT), the calculations should incorporate all revenues earned by a telecom company – including from non-telecom sources such as deposit interests and sale of assets.
- The companies, however, had been of the view that AGR should comprise the revenues generated from telecom services only and non-telecom revenues should be kept out of it.
- The tussle between DoT and the telecom companies has been on since 2005.
- In October 2019, the Supreme Court upheld the DoT’s definition of AGR and held that telecom service providers have to pay fines and penalties on the unpaid fees.
- Subsequently, the DoT filed an application with the court to allow telecom firms to pay the AGR dues worth Rs 1.43 lakh crore in a staggered fashion spread over 20 years.
Why in News?
- The Supreme Court has given 10 years’ time for telecom firms to pay their AGR dues to the government, instead of the old 20-year schedule suggested by the DoT.
- The 10-year timeline is aimed at providing much needed relief to some of the telcos which could have faced the prospect of winding up their operations for being unable to pay the entire amount at one go.
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