Supreme Court Allows Centre to Reconsider Vodafone Idea's Rs 9,450 Crore AGR Dues

Solicitor General Tushar Mehta informed the court that "there is a huge change in circumstances" regarding the case

The Supreme Court today granted significant relief to Vodafone Idea by permitting the Centre to reconsider relaxing Adjusted Gross Revenue (AGR) dues amounting to Rs 9,450 crore. The court justified this decision by stating that the matter falls within the policy domain of the Union government.

AGR is a fee-sharing mechanism that requires telecom operators to share a portion of their revenue with the Centre as licensing fees and spectrum usage charges. A longstanding dispute existed between telecom companies and the Centre regarding the definition of AGR. While telecom giants argued that AGR should be calculated based solely on core services, the Centre maintained that it should include non-telecom services provided by these companies as well.

In a landmark ruling in 2019, the Supreme Court upheld the Centre's definition of AGR and authorized the collection of dues totaling Rs 92,000 crore. This decision dealt a severe blow to major telecom providers such as Vodafone and Bharti Airtel.

Vodafone's recent petition highlighted a new AGR demand of Rs 9,450 crore issued by the Department of Telecommunications. The petition argued that a significant portion of this demand related to the pre-2017 period, which had already been resolved by previous Supreme Court decisions.

Solicitor General of India Tushar Mehta informed the court that "there is a huge change in circumstances" in the case because the government has invested equity in Vodafone. The government now holds a 49 percent stake in the company. He emphasized, "The government's interest is public interest. There are 20 crore consumers. If this company is to suffer, it would lead to issues for consumers."

In its order, the court acknowledged that the Centre is willing to examine the issue. "The government is also willing to reconsider and take an appropriate decision if the court permits. In the peculiar facts, we see no impediment in the government reconsidering the issue. We clarify that this is a matter of policy; there is no reason as to why the Union should be prevented from doing so," the court stated.