GAIL rules out paying AGR dues

GAIL rules out paying AGR dues

The DoT had calculated AGR dues of not just optical fibre but also of the other businesses

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.


Adani Gas reports 61% rise in Q4 net profit

Adani Gas Ltd on Friday reported a 61 per cent rise in standalone net profit to Rs 122 crore for fourth quarter ended March 31. The company had posted a net profit of Rs 76 crore in the year-ago period.

Adani Gas, which retails CNG to automobiles and piped natural gas to household kitchens and industries, saw sales volumes rise 3 per cent to 145 million cubic metres, the firm said in a statement.

However, revenue from operations was 1 per cent lower at Rs 490 crore.

The company did not give reasons for lower revenues and higher profit.

“The recent unfortunate COVID-19 event and the consequential nationwide lockdown in India has impacted the current ongoing demand of CNG and PNG (piped natural gas) by industrial and commercial segments,” the statement said.

City gas distribution falls under essential services and Adani Gas Ltd (AGL) said it will ensure that during this period of crisis, the supply of PNG and CNG is maintained without any interruption.

“Currently, with over 95 per cent of volume coming from the operational geographical areas (GAs), makes the business quite resilient,” it said. We expect to continue to generate healthy cash flows from operations going forward.”

The company said capital contribution for infrastructure development in new GAs has been made from the accruals of the company.

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