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An Overview of AGR-Return Filing

Adjusted Gross Revenue is a type of tax that is charged by telecom operators based on two parameters; these are a basic charge for usage and the second as a licensing fee for carrying out telecom services in the country. The process of submission of these two statements by telecom operators with the Controller of Communication of Accounts (CCA) is known as AGR-Return filing. Any telecom license holder who has obtained the license as per the provisions of Section 4 of the National Telegraph Act has to submit the AGR statements with the CCA of the Department of telecommunications.

Conflict with AGR-Filing

The National Telecom policy liberalised the telecom sector of India in the year 1994 during this time licenses were issued to the telecom operators for a fixed. In 1999 government allowed the telecom brands to switch to a revenue-sharing model. In this revenue-sharing model, the operators will share a percentage of their adjusted gross revenue (sum of annual license fees and spectrum usage charges) with the government. However, there was a lack of clarity regarding the definition of AGR where the Department of telecommunication claimed that it should include revenue from all telecom and non-telecom activities and on the other hand telecom operators claimed that AGR should be restricted to revenue generated from telecom services only. In 2019 Supreme court held AGR to have wide interpretation and be inclusive of revenue which was made from non-telecom activities. But owing to large outstanding dues, the telecoms filed a review petition in 2021, under this judgment the court has rationalised the AGR definition and now it will not include non-telecom revenue from a prospective basis.

Entities that have to file their AGR statements

The following entities have to file their AGR statements in India:

  • UL VNO license- Unified License Virtual Network Operator
  • UL ISP license- Unified License Internet Service Provider License
  • UL ACS- Unified License ACS Category B
  • NLD licence- National Long Distance License
  • ILD license- International Long Distance License

Components of the Adjusted Gross Revenue

The components of the adjusted gross revenue for telecom operators can be divided into three:

Entry Fee

This is a one-time payment that each telecom license holder has to make to initiate the licensing process. This amount shall be capped at a maximum of ₹ 15 crores per company.

Annual License Fee

The license holder must also pay an annual license fee as a percentage of adjusted gross revenue. The Annual license for the first year shall be levied at 8% of AGR this shall be inclusive of the USO levy that is presently at 5%. From the second year, the Annual license fee shall be a minimum of 10% of the entry fee based on the authorised service area.

Spectrum Usage Charges (SUC)

Telecom companies are charged a Spectrum usage charge for various bandwidths ranging from 600 Mhz to 26 GHz. An operator will be charged the SUC based on the weighted average derived by the sum product of spectrum holding and applicable SUC divided by the sum total of spectrum holding.

Documents required to file AGR-Return

Following is the list of Documents required to file AGR-Return:

  • Authorization letter for the representative
  • Certification of Incorporation
  • A copy of the Telecom License
  • Audited Statement of Revenue of the company
  • An audit report of the company
  • Copy of Books of accounts

Process of Filing AGR return

Following is the step by step process of filing AGR Return:

Step 1: The applicant has to visit the SARAS website. The website is designed by the government to deal with all the licenses issued by the Department of telecommunication. A telecom operator can also file AGR returns, bank guarantees and deduction claims through this website.

Step 2: The applicant has to fill in the details of the AGR returns on the portal. Here the applicant must ensure that the calculations for the AGR return prepared them is compliant with the latest guidelines/ notifications issued by the Department of telecommunication.

Step 3: Once the data has been filled, the applicant has to upload the Documents. The Document must corroborate the data filled in by the user and has to be uploaded in PDF format and .xls for excel sheets.

Step 4: The applicant, at this stage, must take a printout of the AGR return form and the Documents. This shall come in handy for future reference in case of any objections or explanations sought by the department.

Step 5: The applicant can have one last check of the form and submit the same to the Department of telecommunication for scrutiny by the Controller of communication of Accounts officials.

Step 6: Once the data has been submitted to the department through the SARAS portal, it will generate a receipt. Keep this receipt safe as this shall act as the proof of timely AGR filing by the operator.

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Corpbiz Assistance for AGR-Return filing

  • Corpbiz will assist you to calculate your AGR dues accurately
  • Our team of experienced professionals file error-free returns
  • Consolidation and submission of relevant Documents
  • Constant follow-ups with the Department of Telecommunication
  • Providing you with the receipt of the successful filing of your AGR dues

Frequently Asked Questions

The annual license fee for telecoms shall be calculated based on a certain percentage of the Quarterly calculated AGR. For the first year, it will be based on 8% of the AGR as per the latest notification of the Department of telecommunication.

To upload Documents the user must make sure that their Documents are either in ".pdf" or ".xls" format and each file should not exceed 2MB in size. Any other format file will not be accepted on the SARAS portal.

Telecom operators who have obtained a license as per section 4 of the National Telegraph act to the Controller of communication of Accounts of the Department of telecommunication.

There are three components of the adjusted gross revenue filing these are entry fee, spectrum usage charges and annual license fee. This has to be paid in a specific percentage based on their service area.

There was a conflict between the telcos and the DoT on the definition of the Adjusted gross revenue, where the telcos tend to have a narrower approach as compared to DoT which wanted a wider interpretation of the same. The issue has been settled with the supreme court's judgements of 2019 and 2021.

The failure to file an AGR return will automatically generate a "show cause notice" against the defaulter.

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