While India has appealed against the ruling before WTO’s Appellate Body last week, MEIS is set to be replaced with Remission of Duties or Taxes on Export Products (RoDTEP) from January 1, 2020, as announced by the finance ministry last month.
The official at the power transmission provider said the Supreme Court order did not apply to non-telecom companies like PGCIL and therefore it would stand by its earlier assessment of licence fee. The official said PGCIL would not make any further payment to the DoT, and added that it had already paid Rs 59 crore as license fee.
The move, which will give over Rs 42,000 crore of relief to the telcos, may not be enough to address the debt concerns of the troubled telcos and ‘much more was needed’ from the government, primarily on adjusted gross revenue (AGR), which may boost stock prices if interest and penalties were waived, according to analysts.
"While operators would love to go to a single network, it saves them money as well, but we can't force people to do things that they don't want to do, we must let the market decide and let the customer decide,” said Rajan Mathews, director general of Cellular Operators Association of India (COAI) said.
Airtel and Vodafone Idea hold the majority of these liabilities, which the DoT has sought through a process started last week. For Airtel, dues are around Rs 35,586 cr - Rs 21,682 cr as LF and Rs 13,904 cr as SUC excluding Tata Tele and Telenor - while for Voda Idea they amount to Rs 53,038 cr, of which Rs 28,309 cr in LF and Rs 24,730 cr in SUC.
Key executives from electronics makers that are among the top manufacturers of mobile phones will meet Niti Aayog officials this week and seek details on the quantum of benefits, its time period, and the category of companies that will get the incentives.
Lawyers say that several companies — including GAIL, Power Grid Corporation, Delhi Metro, RailTel, among others — that are non-telcos but hold telecom licences to provide a range of offering such as internet services, national and international long-distance services and VSAT services, could fall under the DoT’s wider licence fee ambit
The development follows RCom's consolidated loss of Rs 30,142 crore for the second quarter, released on Friday.
Telecos Bharti Airtel and Vodafone Idea have been seeking relief from the government to restore the heath of the telecom sector, including informal requests for establishing floor pricing or minimum tariffs for voice and or data used by customers. The government has been nudging the Trai took into the matter as pricing is in the regulator's domain.
While the carrier has highlighted the need for significant additional financing - which includes accessing diversified sources across markets and currencies - to pay up the demands that the telecom department may raise, it has said that there can be ‘no assurance’ that the company’s plan will be successful.
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