Telecom Department Seeks Rs 48,000 Crore From Oil India In Dues; Company To Challenge  In TDSAT
A telecommunications tower. (Photographer: Susana Gonzalez/Bloomberg)

Telecom Department Seeks Rs 48,000 Crore From Oil India In Dues; Company To Challenge In TDSAT

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The telecom department has slapped a Rs 48,000 crore demand notice on Oil India Ltd. in past statutory dues, an order which the country's second-biggest state oil producer plans to challenge in Telecom Disputes Settlement and Appellate Tribunal.

Following a Supreme Court ruling that non-telecom revenues should be included for considering payments of government dues, the Department of Telecommunications has asked Oil India to pay Rs 48,000 crore in principal dues together with interest and penalty for using optic fibre network for internal communication. The dues sought are double the net worth of Oil India.

"We have received a demand notice for paying payments by Jan. 23. We plan to challenge it in TDSAT," Oil India Chairman and Managing Director Sushil Chandra Mishra told PTI.

OIL is the second oil and gas firm after GAIL (India) Ltd. to have been slapped a demand notice. From gas utility GAIL, the DoT has sought Rs 1.72 lakh crore.

Mishra said his company's contract with the DoT provides for any dispute to be referred to TDSAT and so the company will be approaching the tribunal.

Following the Supreme Court's Oct. 24 order that non-telecom revenues earned by firms using spectrum or airwaves allocated by the government should be considered for calculating statutory dues, the DoT has totalled all the revenues earned by a company in last 15 years and raised demand.

Also read: Telecom Department Examining If January 23 Deadline For AGR Payment Applies To Other PSUs

Sources said companies like OIL pay excise duty, oil development cess, profit petroleum and other levies to the government on oil and gas they produce and do not trade bandwidth to outside parties to earn any revenue.

The optic fibre is only for internal communication purposes such as monitoring wells and production control, they said.

OIL is not going to the Supreme Court as the company was not part of the litigation before the apex court and no direction was issued to it by the court.

From 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 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 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, they said adding 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.

Also read: India’s Banks Face Risk From $13 Billion Telecom Dues, UBS Says

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

Besides GAIL and OIL, the DoT is seeking Rs 40,000 crore from PowerGrid which had both a national long-distance as well as an internet licence.

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