AGR-Return Filing for Telecom Companies in India

The case of Adjusted Gross Revenue is one of the most significant legal struggles of Indian Telecommunication. But what’s the struggle? It’s the struggle for conflict between the definition of AGR between the Department of Telecommunications and telecom companies. On one hand, TRAI was saying that AGR will include all revenues from telecom and non-telecom services. The telecom players were saying that AGR should only include revenue from core services.

In this long case, the telecommunication industry was at stake with billions of dollars. As per the assessment of the Department of Telecommunications, total AGR telecom dues for the industry are approx Rs. 1.19 lakh crore. Here in this article, the complete introduction of Adjusted Gross Revenue, its case and the decision of the Supreme Court is mentioned.

What is AGR-Return Filing?

The AGR full form is Adjusted Gross Revenue and it is a type of tax which is charged by telecom operators. Basically, this is the revenue that telecom companies earn from their licensed activities. It includes revenue from all the sources such as data, voice, service or anything else. The AGR telecom operators submit these statements to the Controller of Communication of Accounts (CCA) is known as AGR-Return filing.

Dispute Start Between TRAI and Telecom Companies

The Telecom Regulatory Authority of India (TRAI) suggests the definition of AGR but there is a dispute between the telecom companies and TRAI. Because TRAI wants to add non-telecom resources to generate revenue. But the telecoms were saying that earnings coming from primary telecom services should considered only.

In a recent decision of the Supreme Court, it concludes that AGR will be rationalised and non-telecom revenue will be excluded on a prospective basis. But this decision does not mean that previous dues of four years are only waived off by the government.

Government Relaxation on Filing AGR-Return

In September 2021, the government announced grant relief to telecom sector companies from paying statutory dues. Then a Public Interest Litigation (PIL) is filed in the Supreme Court to challenge this decision to relax payment terms of the Adjusted Gross Revenue (AGR) due from Telecom Service Providers.

The country’s highest court offered relaxation to telecom service providers who were struggling to pay around Rs. 93 crores of Adjusted Gross Revenue (AGR). The court granted telecom service providers a 10-year period to clear their outstanding amount of Adjusted Gross Revenue (AGR) related dues in September 2020.

It is conclude on the basis of the judgment that the following telecom companies have to pay the whopping amount of Rs. 93,520 crore –

Second Judgement on Constitutes the AGR-Return Filing for Telecom

The second judgment of the Supreme Court gave clarity on what constitutes the AGR. The main point of the judgment was in respect of the AGR telecom dues. The sole purpose of forming TDSAT as a separate body from the Telecom Regulatory Authority of India is to finish the disputes. 

Recent judgment has left the TSPs at a point where the Supreme Court's rigid order has no proper redressal mechanism. The order also stated that the respective telecom operators should make the payment of 10% of the total dues as demanded by DoT by 31-3-2021.

The Telecoms have to make payment in yearly installments from 1-4-2021 up to 31-3-2031 payable by 31st March of every succeeding financial year. The companies via their managing directors/chairmen or other authorized officers. Have to make an undertaking within four weeks, to make the payments as per the order. 

Submit the existing bank guarantees until the payment is done. In case of any default in making payment of annual installments, then the interest is paid as per the agreement along with the penalty and interest on the penalty. Automatically without reference to the Court. It would also be punishable for contempt of court.

Conclusion

India has the cheapest telecom services in the world because of the ease of doing business and the competition in the market. The consumer is able to enjoy good deals at attractive rates. The Cabinet has approved a 4 year moratorium period for the telecom companies for payment of statutory dues to the DoT.

The process of AGR return filing for telecom is important for telecom companies in India. So, if you want to avoid penalties and maintain the good position of your company with the DoT then keep accurate records, file returns on time, and comply with all the set compliances. Reach out to Registrationwala, if you need help in calculating your AGR dues, other file returns, submitting documents, etc.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.