Left Menu
Development News Edition

Vodafone Idea presses for Rs 7,000 cr tax refund; I-T dept hesitant in view of fresh liability


Vodafone Idea presses for Rs 7,000 cr tax refund; I-T dept hesitant in view of fresh liability
Image Credit: Wikimedia

Vodafone Idea, India's third-largest telecom service provider, is seeking about Rs 7,000 crore in tax refunds for past years even as it faces fresh statutory dues liability - running into thousands of crore - that has put the income tax department in a bind, sources privy to the development said. The tax department has in past adjusted refunds against a company's other liabilities towards the government. It had famously adjusted Rs 1,500 crore in tax refunds due to Cairn Energy plc of UK to part settle a retrospective tax demand of Rs 10,247 crore even though the matter was under arbitration.

Sources said Vodafone has to receive an aggregate of about Rs 1,000 crore from the Mumbai unit of the income tax department and another Rs 6,000 crore from its Delhi office for multiple assessment years dating back to 2004-05. The company has got favorable rulings from High Courts and appellate tribunals in some and is now pressing the department to quickly refund the dues, they said.

The income tax department is, however, caught in a bind as Vodafone-Idea Ltd has to pay Rs 44,150 crore to the government in past statutory dues following the Supreme Court ruling that non-telecom revenues have to be included for calculating the payout towards license fee and spectrum usage charge. Sources said the department is of the view that the refund should be adjusted against this demand as there have been some concerns raised in a section of media about the very existence of the company if it were asked to cough up the past statutory liabilities.

The department wants the Finance Ministry in consultation with the Telecom Ministry to decide on dealing with the refund. Vodafone Idea declined to comment on an email sent to the company on the matter.

Vodafone Idea, last week, reported a consolidated loss of Rs 50,921 crore -- the highest ever loss posted by any Indian corporate -- for September quarter on account of liability arising out of the Supreme Court's order in the adjusted gross revenue (AGR) case. The Supreme Court ruled in favor of the government and directed telecom companies, including Vodafone Idea, to pay dues as demanded by the Department of Telecom. Vodafone Idea has said that its ability to continue business will depend on reliefs sought from the government and positive outcome of the legal option it has (the company is in the process of filing a review petition on the AGR matter).

Both Vodafone India and Idea Cellular merged their telecom business to handle the tariff war in the sector, triggered by the new entrant Reliance Jio in 2016. The merged entity Vodafone Idea came into existence on August 31 last year as the biggest telecom operator in the country with 408 million mobile customers. However, the financial woes for the company did not end and the company lost over 100 million mobile subscribers since the merger due to the cut-throat tariff war and chasing higher revenue-yielding minimum recharges.

The company has been investing in building networks. However, low returns from tariffs added to its financial worries. The older telecom operators -- Vodafone Idea and Bharti Airtel -- are staring at massive financial outgo in unpaid statutory dues as Supreme Court has upheld the government's way of calculating the telecom revenue, on which license fee and spectrum charges are computed.

As per the latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies. The Supreme Court has allowed three months to the affected telcos to cough up the amounts due to the DoT, and recently the telecom department shot-off notice to telcos to pay their revenue share dues within the timelines stipulated by the court. The department has given the option to operators to clear all the dues on a self-assessment basis.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION/BLOG/INTERVIEW

What happens to your outstanding loans if the bank falls?

... ...

Time for a change! Innovations to stop the growing plastic pollution

As the planet is drowning in plastic pollution, many new innovative approaches and solutions have emerged to effectively deal with the menace....

How to avoid fake universities and fishing bait like Farmington

As education sharks are roaming around to prey, we present a guide on how to mitigate hunters and reach to a genuine universityinstitute. In this era of commercialization of education, the fake universities and economic frauds in educationa...

How India is being pushed towards commercialization of higher education

The reluctance of the present dispensation in pushing the higher education towards commercialization is not just limited to the fees hike in Jawaharlal Nehru University JNU. It seems the government is gradually implementing a plan which is ...

Videos

Latest News

COLUMN-Personalities outweigh issues at NATO's testy birthday summit: Peter Apps

The celebration of NATOs birthday began with Donald Trump branding his French counterpart Emmanuel Macron nasty and ended with the U.S. president describing Canadian Prime Minister Justin Trudeau as two-faced. It is a measure of Trump-era p...

R Kelly faces bribery charge over fake ID to wed late singer Aaliyah

RB superstar R Kelly is now facing a bribery charge for allegedly paying off a government official more than two decades ago so he could marry late singer Aaliyah who was 15 then and he 27, according to a new indictment unsealed on Thursday...

Lara says Woods' achievements and willpower make him "best ever golfer"

Legendary West Indian cricketer Brian Lara considers American Tiger Woods as the best ever golfer for the sheer willpower he had shown to come out of a personal crisis, besides his achievements on the field. Himself an avid golfer after his...

UK's Labour leader says leaked report exposes PM Johnson's Brexit "fraud"

British opposition Labour leader Jeremy Corbyn said on Friday he had a confidential government report which showed there would be customs checks between Northern Ireland and mainland Britain under a Brexit deal negotiated by Prime Minister ...

Give Feedback