Vodafone Idea soars on paying additional Rs 1,000 cr towards AGR dues

Vodafone Idea jumped 7.88% to Rs 9.58 after the company said it paid additional Rs 1,000 crore to Department of Telecommunications on 17 July 2020 as part of its adjusted gross revenue (AGR) dues.

The company had earlier deposited Rs 6,854 crore in 3 tranches. The company has thus paid an aggregate amount of Rs 7,854 crore towards the AGR dues, the telco said in a filing on Saturday (18 July).

The company highlighted that the Supreme Court at the last hearing held on 18 June 2020 ordered: We have requested the telecom operators to file audited Balance Sheets, for the last 10 years including for the calendar year ending 31.3.2020 as well as the Income Tax Returns and the particulars of AGR deposited during the last 10 years and we have also requested to make payments of reasonable amount also to show their bonafides, before the next date of hearing."

The Supreme Court on 24 October 2019 ruled in favor of the Government on the AGR issue, with grave revenue implications to the tune of over Rs 92,000 crore for the ailing telecom sector. AGR is the basis on which Department of Telecommunications (DoT) calculates levies payable by operators. Telecom operators are liable to pay around 3-5% and 8% of the AGR as spectrum usage charges and licence fees, respectively, to DoT. Telcos argued that AGR should comprise revenue from telecom services, but DoT insisting that AGR should include all revenue earned by an operator, including that from non-core telecom operations.

Consequent to the SC judgement, Vodafone Idea accounted for the estimated liability of Rs 27,610 crore related to license fee and Rs 16,540 crore related to spectrum usage charges up to 30 September 2019, including the interest, penalty and interest thereon of Rs 33,010 crore.

Vodafone Idea recorded a consolidated net loss of Rs 11,643.50 crore in Q4 March 2020, higher than net loss of Rs 4,881.90 crore in Q4 March 2019. Consolidated revenue from operations fell 0.17% to Rs 11,754.20 crore in Q4 FY20 over Rs 11,775 crore in Q4 FY19.

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