DoT Seeking Payment From  Non-Telecom PSUs Result Of ‘Communication Gap’: Dharmendra Pradhan
Dharmendra Pradhan in New Delhi, India. (Photographer: Prashanth Vishwanathan/Bloomberg)  

DoT Seeking Payment From Non-Telecom PSUs Result Of ‘Communication Gap’: Dharmendra Pradhan


The Department of Telecommunications seeking nearly Rs 3 lakh crore in dues from non-telecom public sector undertakings, such as GAIL (India) Ltd., Oil India Ltd. and Power Grid Corporation Of India Ltd., was a result of "communication gap" as these firms do not owe any such amount, Oil Minister Dharmendra Pradhan said on Thursday.

Following the Oct. 24 Supreme Court ruling that non-telecom revenues of telecom firms such as Bharti Airtel Ltd. and Vodafone Idea Ltd. should be included for considering payments of government dues, the telecom department sought Rs 1.72 lakh crore from gas utility GAIL, Rs 48,000 crore from OIL, Rs 40,000 crore from Power Grid and raised similar demands from RailTel and other public sector undertakings.

The government's demand from such companies increased many times more than their net worth and the Centre asked them to go to the Supreme Court against such dues. While Oil India Ltd. filed a clarificatory/modificatory petition on Wednesday, GAIL approached the apex court on Thursday.

"We are in discussion with the telecom ministry. We had given them our reply (on the demand raised)," Pradhan told reporters in New Delhi. "Possibly because of communication gap, the Government of India's one department has raised such demand on PSUs under another government department."

He said parallel to discussions with the DoT, the Supreme Court has been approached on the issue.

"Where is GAIL in core telecom work? Is PGCIL in core telecom work or does Oil India do any core telecom job," he asked. "We feel there should be no impact (of the Oct. 24 Supreme Court ruling) on these companies."

Pradhan said the approach to the Supreme Court and discussions with the DoT were being conducted simultaneously.

He, however, did not say if seeking relief from the Supreme Court was limited to PSUs under his ministry filing pleas in the apex court or his ministry would also file a petition.

The DoT raised the demands on the non-telecom PSUs for leasing out surplus optical fibre network that was primarily for their internal communications under National Long Distance Service licences or IP-1/IP-2.

The demand notices by the DoT follow the Supreme Court's Oct. 24 order that broadened the definition of adjusted gross revenue for telecommunications companies to include non-core operations. AGR is used as a basis for the calculation of licence fees and spectrum usage charges owed to the government. GAIL, Oil India, Power Grid and other non-telecom PSUs were not a party to this litigation.

Also read: Telecom Department Directs Officials Not To Act Against Telecom Companies On AGR Non-Payment Until Supreme Court Hearing

OIL in its petition to the Supreme Court stated that it will have to shut down operations if it is forced to pay an amount that is twice its net worth.

"OIL had obtained a National Long Distance Service Licence (NLD Licence) to establish supervisory control and data acquisition system (SCADA system) for control, management, and protection of OIL's pipeline network used for transportation of crude oil, natural gas, and petroleum products," the company had said in a statement on Thursday. "As per the licence terms, the licence fee is to be paid on gross total revenue from services provided under the NLD Licence. Since the award of NLD licence, the cumulative revenue of Rs 1.47 crore is earned by OIL from the leasing of spare bandwidth capacity on which all applicable licence fee and other statutory dues as per licence terms have been paid by OIL regularly."

The company stated that based on the recent Supreme Court ruling, "Department of Telecommunications issued demand notices to OIL also seeking payment of licence fee on total reported revenue including revenue from sale of crude oil, natural gas etc, which neither relate to the NLD licence nor can be treated as supplementary/value-added services related to the NLD licence."

"Till date, OIL has received demand notices for the period from FY2007-08 to FY2018-19 amounting to over Rs 48,000 crore including licence fee, penalties and interest," the statement had said.

From gas utility GAIL, the DoT has sought Rs 1,72,655 crore in dues on IP-1 and IP-2 licences as well as internet service provider licence. In response, GAIL has told the DoT that it owes nothing more than what it has already paid to the government.

The firm told the DoT that it had obtained ISP licence in 2002 for a period of 15 years, which expired in 2017. But GAIL never did any business under the licence, and since no revenue was generated, so it cannot pay any amount.

On IP-1 and IP-2 licences, GAIL has told the DoT that it generated Rs 35 crore of revenue since 2001-02 and not Rs 2,49,788 crore that has been considered for levying past dues, adding that the revenue number the DoT is considering is after adding all the revenues that the company earned from gas trading and transportation business.

Sources said the dues being sought are more than three times the net worth of GAIL and several times the actual revenue earned.

While telecom companies such as Bharti Airtel and Vodafone Idea may have had non-telecom revenues generated from using the government licence and spectrum, firms such as GAIL and OIL had no such revenue.

The DoT is seeking Rs 1.47 lakh crore from all telecom companies in past statutory dues.

Also read: Reliance Jio Pays Rs 195 Crore To Clear All AGR Dues In Advance

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.