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OIL takes DoT to court over Rs 48,000-cr dues demand

OIL said that it has filed a clarificatory/ modificatory petition in the Supreme Court against the dues demanded by DoT
New Delhi: India’s second-largest oil exploration and production company, OIL (Oil India Limited) said on Wednesday that it has filed a clarificatory/ modificatory petition in the Supreme Court against the dues demanded by the Department of Telecommunications (DoT). PSU Watch had earlier reported that DoT had asked OIL to pay Rs 48,000 crore in principal dues together with interest and penalty for using optic fibre network for internal communication. The Rs 48,000-crore demand has been raised by the DoT on cumulative revenue of Rs 1.47 crore OIL had earned on an NLD telecom licence.

How did OIL incur these dues?

“OIL had obtained a National Long Distance Service Licence (NLD Licence) to establish Supervisory Control and Data Acquisition System (SCADA System) for control, management, and protection of OIL’s pipeline network used for transportation of crude oil, natural gas, and petroleum products,” the company said in a statement. The NLD licence is used primarily for the SCADA system and only the spare bandwidth capacity is leased out to other telecom operators. “As per the licence terms, licence fee is to be paid on gross total revenue from services provided under the NLD licence. Since the award of NLD licence, the cumulative revenue of Rs 1.47 crore is earned by OIL from the leasing of spare bandwidth capacity on which all applicable licence fee and other statutory dues as per licence terms have been paid by OIL regularly,” it said.

Here’s why OIL think dues sought by DoT is unfair

In the official statement, OIL contended, “Department of Telecommunications (DoT) issued demand notices to OIL also seeking payment of licence fee on total reported revenue including revenue from sale of crude oil, natural gas etc, which neither relate to the NLD licence nor can be treated as supplementary/ value-added services related to the NLD licence.” “Till date, OIL has received demand notices for the period from FY 2007-08 to FY 2018-19 amounting to over Rs 48,000 crore including licence fee, penalties and interest,” it added. OIL also said that the matter has been taken up with the DoT and the Petroleum Ministry, along with other affected central public sector enterprises, and “explained the non-applicability of interpretation of AGR to non-telecom companies.”

The backdrop

After the October 24 verdict given by the Supreme Court, non-telecom revenues earned by firms using spectrum or airwaves allocated by the government should also be considered for calculating non-telecom revenues. The DoT, therefore, totalled all the revenues earned by a company in the last 15 years and raised a demand.