TDSAT Asks Dot To Return Rs 2000 Cr To RCom

In a major relief to the soon-to-be-bankrupt Reliance Communications, telecom industry’s appellate tribunal TDSAT has cancelled the Rs 2000 crore demand made by DoT as one time spectrum charge or OTSC.

“The Hon’ble Telecom Disputes Settlement and Appellate Tribunal (TDSAT) today upheld Reliance Communications Limited’s (RCOM) petition against the Department of Telecommunications (DoT), challenging DoT’s decision to impose One-Time Spectrum Charge (OTSC) on its contracted CDMA and GSM spectrum resources,” RCom informed the media in a statement.

According to the tribunal, any telecom operator’s spectrum holdings of upto 5 MHz in the CDMA band and upto 6.2 MHz in the GSM band were exempt from any OTSC levies. TDSAT hence set aside the levy of OTSC on RCOM’s said spectrum.

Not only that TDSAT also directed the DoT to return RCom’s Bank Guarantee (BG) of Rs 2,000 crore, as per its earlier order passed on 3 July 2018.

In 2012 the government had said telecom operators that hold GSM spectrum of more than 6.2 MHz will have to pay OSTC retrospectively from July 2008 to January 2013. For spectrum holding above 4.4 MHz, telcos need to pay the fee starting 1 January for the remaining period of their license. Similarly, Government had levied a fee for operators holding CDMA spectrum beyond 2.5 MHz.

In this manner, in 2012, the government had demanded close to Rs 24,000 crore from operators including Bharti Airtel, Vodafone India, Idea Cellular, RCom, BSNL, MTNL and Aircel. All the operators, however, had challenged the order in TDSAT.

This return of Rs 2000 crore as bank guarantee comes as a big relief for RCom as the operator last week had decided to file for insolvency and approached NCLT. Though this Rs 2000 crore can not save the firm from going bankrupt, it will certainly take some burden off the Anil Ambani-led firm as the company has to pay off multiple lenders of less than amount. A case for example is Ericsson with a payment demand of Rs 550 crore.

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