The Supreme Court has ruled in favour of the Department of Telecommunications in the issue of whether the adjusted gross revenue (AGR) condition in the revenue sharing licence agreement was valid.
Prior to this, operators had questioned the AGR’s validity under the revenue sharing licence agreements signed with DoT as per the National Telecom Policy 1999.
They had argued that the AGR could pertain to only the revenue directly arising out of telecom operations after adjustment of expenses and write-offs and revenues directly not attributable to the licensed telecom activities.
The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had upheld their view.
A Supreme Court bench of Justices R.V. Raveendran and A.K. Patnaik said that both the Telecom Regulatory Authority of India (TRAI) and TDSAT could not decide the validity of the AGR in the licence agreement and exclude certain items of revenue from it.
However, it was clarified that the operators could appeal to the tribunal to question the mode of computation of the demand raised by the government on the basis of AGR.
