AGR an unprecedented crisis, sought cut in taxes for industry: Mittal
New Delhi, February 20, 2020
Bharti Airtel chairman Sunil Mittal on Thursday met Communications Minister Ravi Shankar Prasad in the wake of the current AGR payment to be made by the telcos, saying he suggested that, for the overall health of the industry, taxes needed to be brought down.
Mittal, however, said the issue of AGR payment per se did not figure in the talks. The discussion was on the overall industry, he said.
"Adjusted Gross Revenue has been an unprecedented crisis for the telecom industry. I made certain suggestions on the overall health of the industry. Industry has been heavily taxed and taxes need to be looked at. The issue of very low revenues left in the kitty of the industry needs to be addressed and the AGR also need to be dealt with," he said after the meeting with Prasad.
He said Airtel will make the balance payment expeditiously. "The demand for reduction in taxation for the telecom sector has been for a long time. The regulator has been supporting it," he said in response to a query if he had sought any cut in levies.
Mittal met the Minister amid reports that said government was looking at some form of relief for the sector in view of huge AGR dues to be paid by telcos.
The telcos, particularly Vodafone Idea, which is severely hit by the AGR payment, has sought a bailout. The options here before the government are limited. There could be a cut in licence fee and spectrum usage charges, staggered payment of AGR over long years with interest, a waiver of interest and penalties on AGR dues.
So far the Government has neither stated nor indicated any relief for the telcos. On Wednesday, Mittal met Finance Minister Nirmala Sitharaman and sought sustainability for telcos in the current stressful times. He had said Indian telecom industry has been under stress for the last three-and-a-half years and the government should ensure sustainability of the sector.
"The only thing government needs to do is to focus on how to ensure sustainability of the sector," he said after meeting the FM.
Airtel faces Rs 35,500 crore AGR dues. The company has already announced its plans to pay the dues that arose from the Supreme Court ruling.
Earlier this week, Bharti Airtel had paid Rs 10,000 crore to the telecom department as part of its AGR dues. The company plans to pay the balance amount before the next date of Supreme Court's hearing which is on March 17.
Former Finance Secretary Subhash Chandra Garg has said in a blog that telecom crisis is not limited to AGR and that the problems are much deeper.
Vodafone Idea Chairman Kumar Managalam Birla, had also met the Finance Minister on Wednesday. The troubled telecom major has also paid Rs 2,500 crore to the Department of Telecom (DoT) earlier this week and paid another Rs 1,000 crore on Thursday.
Vodafone Idea has an AGR bill of Rs 53,000 crore. The company has sought relief from government to remain a going concern.