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India's Top Court Grants 10 Years to Telecom Firms to Pay Statutory Dues Worth $20 Bn

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New Delhi (Sputnik): Last November, Vodafone's global CEO Nick Read said the company's future in India was doubtful. Even though he immediately retracted it, weeks later his Indian partner and chairman of Vodafone Idea said it may close. India’s Department of Telecommunications dragged telecom firms to court last year, demanding statutory dues.

India's Supreme Court on Tuesday allowed the telecom firms to pay statutory dues worth $20 billion over the next 10 years, with the date commencing from April 1 next year.

The telecom firms, however, will have to pay 10 percent upfront.

While delivering the judgement on the matter, which has been under review since October last year, the Justice Arun Mishra-headed bench said: “Default in payments would invite interest, penalty, along with contempt of court.”

Speaking on the judgement, Senior Counsel Kapil Sibal, appearing for Indian telecom firm Bharti Airtel said: “The government was willing to give 20 years but the Supreme Court said 10.”

“Each company will decide if they want to file a review petition,” he said, while clarifying the 10 percent upfront payment will be from the balance outstanding and not the total $20 billion dues, as the telecom firms have paid the government some already.

It may be noted that during the course of the hearing over the last six months, telecom firm Vodafone Idea Ltd – a partnership between Britain’s Vodafone and India’s Aditya Birla Group, has paid $853 million, out of its total statutory dues, worth $6.8 billion.

Similarly, Bharti Airtel, a major Indian telecom player, has paid almost half of the $4.6 billion it owes to the government.

Statutory dues pertain to the non-payment of Adjusted Gross Revenues (AGR) that the telecom firms have not paid to the government for over 15 years.

Under the National Telecom Policy, 1,994 licences were issued to telecom operators for a fixed licence fee.

However, as the fee was very high, the government offered to charge it in the form of revenue sharing. It is this revenue share that the government has not received from the telecom players, after which it approached the Supreme Court.

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