 "Vodafone Idea slapped with ₹638 crore GST penalty, plans legal challenge")
Vodafone Idea (Vi) has received a goods and services tax (GST) penalty order of ₹637.9 crore due to the alleged short payment of tax and excess availment of input tax credit, the telecom operator said on Thursday.
The order was issued by the Office of the Additional Commissioner, Central GST (CGST), Ahmedabad South, under Section 74 of the CGST Act, 2017, it added.
The company, however, disputed the order, saying that it will take appropriate legal action against it. It also said that the maximum financial impact of the order would be limited to the extent of tax demand, interest and penalty levied.
The penalty follows close on the heels of a major relief for the debt-laden telecom operator, after the Union Cabinet on Wednesday decided to freeze its Adjusted Gross Revenue (AGR) dues, and granted it a five-year payment moratorium.
On Wednesday, Vi also said that it has reached a revised agreement with its promoter group, UK-based Vodafone Group, to recover up to ₹5,386 crore in liabilities linked to the 2017 merger of Vodafone India and Idea Cellular.
Under the arrangement, Vodafone Group and other promoters will infuse ₹2,307 crore in cash into the Indian company over the next 12 months. Apart from this, Vodafone Group shareholders will also set aside 3.28 billion Vodafone Idea shares for five years, which can be sold at the company’s direction. The funds raised from this sale will also go to Vodafone Idea.