TDSAT gives Centre licence to bill telcos on non-telecom revenue

Via The Financial Express | Apr 24, 2015

In a setback to mobile operators, the Telecom Disputes Settlement and Appellate
Tribunal on Thursday ruled that certain non-telecom revenues like rent, profit o
n sale of fixed assets, dividend and treasury income would be counted as adjuste
d gross revenue on which licence fee would have to be paid to the government. Th
e ruling has not gone entirely against the operators as it has exempted a large
number of streams from the definition of AGR like capital receipts, bad debt, di
stribution margins to dealers and forex fluctuations, which would be beneficial
to the companies; however, the gains made here are relatively smaller than in th
e streams that have been included. Further, the broad principle followed by the
tribunal that income generated through a telecom company should be counted as te
lecom revenue and its timing is not favourable to the telcos.
Though the TDSAT disposed of the operators petitions against the government with
its ruling, the decade-long issue is unlikely to end here as the operators are l
ikely to challenge it before the Supreme Court. That s because the Telecom Regulat
ory Authority of India had in January come out with a set of recommendations on
the definition of AGR that was far more liberal but may now be junked, as the go
vernment is likely to stick to the TDSAT ruling. Even if the matter is challenge
d before the SC, the government is unlikely to take any steps that may deviate f
rom the tribunal s ruling.
The Economic Times
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