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OIL pleads against AGR notice

OIL said it has taken up the matter with the DoT and the ministry of petroleum and natural gas
Following the October 24 Supreme Court ruling that non-telecom revenues of telecom firms should be included for considering payments of government dues, the telecom department asked OIL to pay Rs 48,000 crore in principal dues together with interest and penalty

Our Special Correspondent   |   New Delhi   |   Published 22.01.20, 07:47 PM

State-owned Oil India Ltd (OIL) on Wednesday said it has filed a clarificatory petition in the Supreme Court against a Rs 48,000-crore demand raised by the department of telecom following the verdict on the adjusted gross revenues (AGR).

“Till date, OIL has received demand notices for the period between 2007-08 and 2018-19, amounting to over Rs 48,000 crore, including licence fee, penalties and interest,” the firm said in a statement.

OIL said it has taken up the matter with the DoT and the ministry of petroleum and natural gas along with other affected central public sector enterprises and “explained the non-applicability of interpretation of AGR to non-telecom companies”, it said.

“On January 22, 2020, OIL has filed a clarificatory/modificatory petition before the Supreme Court against its order and the next course of action will be based on the outcome of the petition,” the statement said.

Following the October 24 Supreme Court ruling that non-telecom revenues of telecom firms such as Bharti Airtel and Vodafone Idea should be included for considering payments of government dues, the telecom department asked OIL to pay Rs 48,000 crore in principal dues together with interest and penalty. The dues sought are double the net worth of OIL.

“OIL had obtained a National Long Distance Service Licence (NLD Licence) to establish a supervisory control and data acquisition system (SCADA System) for control, management, and protection of OIL’s pipeline network used for transportation of crude, natural gas and petroleum products,” the company said.

The NLD licence is predominantly used for the SCADA system and only spare bandwidth capacity is leased out to other telecom operators.

“According to the licence terms, a fee is to be paid on gross total revenue from services provided under the NLD licence. Since the award of the 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 under the licence terms have been paid by OIL regularly,” it said.

The company said based on the recent Supreme Court judgment, the “department of telecommunications (DoT) issued demand notices to OIL to pay up the licence fee on total reported revenue, including revenue from the sale of crude oil and natural gas, which neither relates to the NLD licence nor can be treated as supplementary/value-added services related to the NLD licence.”

Apart from telecom firms, the DoT has sought about Rs 3 lakh crore from non-telecom firms, which had a licence for internal communication and signaling.

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