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Supreme Court ruling on telcos may be a one-time hit, say analysts

Say I-T demand for shortfall in taxes for the prior period, along with applicable penalties, is likely

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3 min read Last Updated : Oct 17 2023 | 11:07 PM IST

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Treating licence fees paid by telcos as capital expenditure —in terms of the Supreme Court order — is manageable for the future even though potential dues that might have accrued in the past will be difficult to calculate, according to Morgan Stanley.

However, there could be a significant one-time impact for older telcos Bharti Airtel and Vodafone Idea if the income-tax authorities raise demand for the shortfall in taxes for the initial years, Kotak Institutional Equities said.

On Monday, the court ruled the licence fees telcos paid, despite being in annual instalments and linked to annual gross revenue (AGR), remained capital expenditure

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