Government Settles ₹1,553 Crore Tax Dispute Between RailTel and DoT
By MYBRANDBOOK
The Committee of Secretaries decided that the ₹1,553 crore demand on RailTel's non-telecom revenue should be withdrawn in public interest. DoT will inform the Supreme Court about this decision in its next annual AGR compliance affidavit due in April 2025.
In a significant move towards tax dispute resolution, the Indian government has settled a ₹1,553 crore corporate tax dispute between RailTel Corporation of India Ltd. and the Department of Telecom (DoT). The long-standing issue, related to license fees on non-telecom revenue, was resolved under the Government Settlement Mechanism, specifically through the Administrative Mechanism for Resolution of CPSE Disputes (AMCRD).
The dispute stemmed from DoT’s demand that RailTel pay license fees on its non-telecom earnings, a claim that was contested by the state-run telecom infrastructure provider. After a thorough review, the Committee of Secretaries ruled in favor of RailTel, deciding that the ₹1,553 crore demand should be withdrawn in public interest. This resolution marks a crucial step in ensuring fair policy implementation in the telecom sector while preventing unnecessary financial strain on public sector enterprises.
With this settlement, DoT is set to formally withdraw its demand and will inform the Supreme Court about the decision in its next Adjusted Gross Revenue (AGR) compliance affidavit, due in April 2025. The development is expected to bring much-needed relief to RailTel and could set a precedent for similar corporate tax disputes in the telecom and infrastructure sectors.
This resolution also aligns with the government’s broader efforts to improve the ease of doing business by addressing legacy tax disputes and fostering policy clarity in the telecom sector. Such initiatives could encourage investments, boost operational efficiency, and strengthen the overall digital infrastructure in India.
Based on this order, DoT had earlier withdrawn similar demands for eight other PSUs with non-access service licenses.
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