Some solution has to be found in Vi's AGR case, Centre tells Supreme Court

The Centre told the Supreme Court that a solution must be found in Vodafone Idea's plea against additional AGR dues, with the matter adjourned for further hearing next week

The Centre on Friday told the Supreme Court that “some solution has to be found” regarding Vodafone’s fresh plea seeking directions to set aside the telecom department’s additional demand for adjusted gross revenue (AGR). 

The Centre told the court that talks were on between the government and Vodafone. 

Appearing for the Centre, Solicitor General Tushar Mehta said the central government had become a major shareholder in Vodafone. 

“The Government of India has also infused 50 per cent equity. So we are stakeholders. A solution may have to be found, subject to your Lordships’ approval. If it can be kept next week, we can think of some solution,” Mehta said. 

 

Shares of Vi (Vodafone) gained following the hearing of the case and ended the day at ₹8.62, its highest since February 14.

  The Supreme Court had raised doubts whether it could consider a fresh plea filed by Vodafone relating to AGR, given that the court had earlier dismissed a similar petition by the telecom operator. 

Mehta, however, said the situation had changed since the dismissal of the previous petitions. 

Supporting the argument, Senior Advocate Mukul Rohatgi, representing Vodafone, submitted that the present petition rested on new facts and was distinct from the earlier proceedings. 

“What has prompted me to come today has nothing to do with the old case,” he told the court. 

A Bench led by Chief Justice of India B R Gavai, along with Justice K Vinod Chandran and Justice N V Anjaria, are hearing Vodafone’s writ petition, which seeks setting aside the additional AGR demand by the telecom department, arguing that it belonged to the pre-2016-17 period, which had been settled by the Supreme Court’s earlier ruling. 

The apex court had in 2020 locked Vodafone Idea’s AGR till 2016-17, based on calculations by the telecom department. 

According to the new petition, the department has demanded ₹9,450 crore, of which ₹5,606 crore falls under the 2016-17 period. 

The court had, in 2020, ruled that there would be no recalculation of dues, setting liabilities for Vodafone Idea at ₹58,254 crore. This is not the first time Vodafone has approached the apex court on the matter.

 

Sector experts said that the Centre’s admission that a solution needed to be found was indicative of a positive development for the company. 

“The solution the government and Vodafone Idea come up with will have to be seen but this is the first time that they have not legally opposed Vodafone Idea’s petition,” said an expert. 

A senior industry executive said the resolution of the AGR dues would go a long way in keeping the telco competitive since bankers and financial institutions awaiting clarity on the matter would be willing to provide financial assistance to Vodafone. 

As things stand, VI has reached out to non-banking sources to secure funding for capex and expanding its 4G and 5G services.

 

With inputs from Gulveen Aulakh 

Vi slapped with tax penalty of ₹6.47 crore

 

Telecom major Vodafone Idea (Vi) on Friday said that it had been slapped with a tax penalty of ₹6.47 crore by the Central GST office in Ahmedabad. The company is accused of wrongly taking Cenvat credit, which is a type of tax credit businesses can claim for taxes paid on equipment or capital goods. The penalty includes the unpaid tax, interest, and the fine. 

Vi said it does not agree with the decision and will appeal in court. The total financial impact equals the penalty along with the tax and interest the company owes.