What is Adjusted Gross Revenue?

There was a tussle between the Telecommunication industries and the GoI over the license fee settlement. The Union Budget waived penalty for those who paid their interest charges over the disputed tax liabilities before March 2020. The case over the license fee settlement was pronounced in favour of the GoI recently. Following this, several companies like Airtel, Vodafone, TATA have recently paid their dues

What is AGR?

Adjusted Gross Revenue are mainly collected from two main charges namely usage and licensing fee. Apart from these fees, it also includes other revenues like profits, revenue from assets, etc.

The spectrum usage charges are pegged between 3% and 5%. The licensing fee is 8%.

However, since 2005, the Telecom companies have been registering cases in the apex court for proper definition of AGR. In 2015, the SC ruled that AGR included dividend, capital receipts, miscellaneous income, profit from sale of fixed assets, etc.

What was the tussle?

The New Telecom Policy 1999 says that the Telecom operators are required to pay a part of their AGR (Adjusted Gross Revenue) to the GoI as License Fee. While GoI includes revenue from all the assets and profits, the Telecoms argue that the charges under AGR should be pertained only to revenue generated from Telecom services.

Month: Current Affairs - February, 2020