The government is preparing to waive the retrospective adjusted gross revenue (AGR) dues imposed on RailTel, and is expected to notify the Supreme Court of this decision early next month. The resolution of the dispute between the Department of Telecommunications (DoT) and RailTel comes in the wake of recommendations made by a committee of secretaries. According to an internal note, the DoT suggested that RailTel, being a public sector entity, should receive the same relief as other state-owned enterprises, whose non-telecom revenue-based dues were previously withdrawn.
The note, dated March 20, 2025, stated that the withdrawal of non-telecom revenue demands is in the public interest, and that the department will communicate this decision in its annual AGR compliance affidavit to the apex court. On October 10, 2024, the DoT’s assessment had included total revenue, such as income from railway operations, consultancy services, electricity charges, and interest earnings, amounting to Rs 15.53 billion.
The Railway Board, however, highlighted that no other state-run firm had been subjected to licence fees on such non-telecom revenues. It also noted that the licence fee under Part B of the demand was Rs 15.53 billion, while RailTel’s net worth stood at Rs 18.27 billion as of March 31, 2024.
During the resolution process, the telecom department cautioned the committee that enforcing the demand could significantly impact RailTel’s market valuation and even threaten its viability. Further, after consultations between ministries, the DoT opted to retract the October 2024 assessment, citing public interest and the fact that the revenue in question had been classified as non-telecom income by RailTel’s statutory auditors and accepted by the assessing authority.
