<h1 class="ql-align-center">Adjusted Gross Revenue (AGR)</h1> <h2>Context:</h2> <ul><li>The Supreme Court has allowed telecom companies&nbsp;10 years’ time to pay their adjusted gross revenue (AGR) dues to the government</li></ul> <h2>Adjusted Gross Revenue (AGR):</h2> <ul><li>AGR is the fee-sharing mechanism that telecom operators are charged by the Department of Telecommunications (DoT).</li></ul> <ul><li>It is divided into spectrum usage charges and licensing fees, fixed between 3-5 percent and 8 percent respectively.</li></ul> <ul><li>It is calculated based on all revenues earned by the telcos, including non-telecom-related sources such as deposit interests and asset sales.</li></ul> <h2>Background:</h2> <ul><li>National Telecom Policy, 1994 liberalised the telecom sector,&nbsp;after which licenses were issued to companies in return for a fixed license fee.</li></ul> <ul><li>To provide relief from the steep fixed license fee, the&nbsp;government in 1999&nbsp;gave an option that mobile telephone operators were required to share a percentage of their AGR with the government as&nbsp;annual license fee&nbsp;(LF) and&nbsp;spectrum usage charges (SUC).</li></ul> <ul><li>The definition of AGR has been under litigation for 14 years. In 2005,&nbsp;the Cellular Operators Association of India&nbsp;(COAI) challenged the government’s definition for AGR calculation.</li></ul> <ul><li class="ql-indent-1">DoT argued that AGR includes&nbsp;all revenues from both telecom and non-telecom services.</li></ul> <ul><li class="ql-indent-1">Companies claimed that&nbsp;AGR should comprise just the revenue accrued from core services&nbsp;and not dividend, interest income, or profit on the sale of any investment or fixed assets.</li></ul> <ul><li>In 2015, the&nbsp;Telecom Disputes Settlement and Appellate Tribunal (TDSAT)&nbsp;stayed the case in favour of telecom companies</li></ul> <ul><li>However, setting aside TDSAT’s order, the Supreme Court upheld the definition of AGR.</li></ul> <ul><li class="ql-indent-1">AGR includes rental receipts, dividend income, and income from any other activity arising out of the telecom licence the company has.</li></ul> <ul><li>Later the Court rejected a 20-year payment timeline proposed by the central government and telecom companies and has given 10 years’ time to repay the AGR dues.</li></ul>