State-owned gas transporter GAIL, which needs to cough up Rs 1.83 lakh crore as adjusted gross revenue (AGR) dues to the DoT, has said the amount is not payable as it is not related to the licence norms and has asked the department to withdraw the order.

“The amount assessed in provisional assessment orders are not payable, being unrelated to the terms and conditions of the IP-II Licence obtained by the company and hence are also legally not tenable and the company had refuted these provisional assessment orders and requested for their withdrawal by the DoT,” the state-owned firm said in an exchange filing.

Sources said the DoT had calculated AGR dues of not just optical fibre but also of the other businesses.

They said GAIL obtained the ISP (internet service provider) licence in 2002 for a period of 15 years, which expired in 2017. However, GAIL has never done any business under the ISP licence. Since no business is done under ISP licence, there is no amount payable.

The DoT had raised demands and issued provisional assessment orders on the non-telecom public sector undertakings (PSUs) for leasing out surplus optical fibre network that was primarily used for their internal communications under the National Long Distance Service licences.

In provisional assessment orders, the DoT has raised a demand on GAIL of Rs 1.83 lakh crore towards annual licence fee, including interest and penalty on AGR.

The DoT is demanding a licence fee from GAIL at 8 percent of its total revenue and not just on its miniscule optic fibre revenue.

Oil minister Dharmendra Pradhan had said that the notices and assessments were served to non-telecom firms was because of a communication gap.

The demand notices by DoT follow the SC’s judgement on 24 October 2019 that broadened the definition of AGR for telecommunications firms to include non-core operations. Non-telecoms companies such as GAIL (India) and Oil India are of the opinion that the expanded definition of AGR is not applicable to non-telcos.

The apex court had asked GAIL, from whom department of telecommunications (DoT) has demanded AGR dues, “to seek appropriate remedy before the appropriate forum”.

“Thus, the AGR issue is likely to remain an irritant until TDSAT or a higher court to which the matter may be taken rules on it. However, we expect the eventual ruling to favour GAIL establishing that it is not required to pay license fee on its non-telecom revenues,” ICICI Securities said in a report.