SC permits Centre to review Vodafone Idea’s plea on additional AGR dues

In a key development for India’s telecom sector, the Supreme Court on Monday allowed the Central government to examine Vodafone Idea Ltd’s plea challenging the Department of Telecommunications’ (DoT) additional adjusted gross revenue (AGR) demands for the period up to 2016-17. The court observed that the matter falls within the government’s policy domain.

A bench led by Chief Justice B. R. Gavai and Justice K. Vinod Chandran passed the order while hearing Vodafone Idea’s petition contesting the DoT’s fresh AGR-related claims. The telecom major argued that these additional demands were unjustified since the company’s liabilities had already been determined under the Supreme Court’s 2019 ruling on AGR dues.

During the hearing, Solicitor General Tushar Mehta, appearing for the Centre, informed the court that the government currently holds a 49 percent stake in Vodafone Idea, and nearly 20 crore consumers depend on its services. He said the Centre was willing to review the company’s concerns to ensure that consumer interests were protected.

“The solicitor general, on instructions, states that considering the change in circumstances, with the Union now holding 49 percent equity and 20 crore customers relying on the petitioner’s services, the government is willing to examine the issues raised,” the bench noted in its order.

Acknowledging that the Centre’s equity infusion had a direct bearing on millions of consumers, the bench said there was no reason to stop the Union from reconsidering the issue. “Since the matter lies within the policy framework of the Union, we find no impediment in allowing the government to take an appropriate decision,” Chief Justice Gavai stated.

Vodafone Idea, represented by senior advocate Mukul Rohatgi, argued that the DoT’s additional demand of ₹5,606 crore for FY 2016-17 was untenable, as the dues were already settled after the apex court’s 2019 AGR verdict.

The AGR , or adjusted gross revenue , is the income figure used to compute licence fees and spectrum usage charges payable by telecom companies to the government. The long-running AGR dispute, primarily over whether non-telecom revenues should be included in the calculation, has been one of the most contentious issues in India’s telecom history.

The AGR controversy dates back to the early 2000s , when telecom companies and the DoT disagreed on what should count as “revenue.” Operators argued that only income from telecom services should be included, while the DoT insisted that revenue from all sources, including rent, interest, and asset sales, must be part of the calculation. In October 2019 , the Supreme Court upheld the DoT’s definition, ruling that non-telecom income would also be included in AGR. This decision resulted in massive dues for telecom firms such as Vodafone Idea and Bharti Airtel, running into thousands of crores in unpaid licence fees, interest, and penalties.

With the Supreme Court’s latest order, the ball is now in the government’s court to revisit the issue, balancing policy, revenue, and consumer considerations in a sector vital to India’s digital economy.