Supreme Court deals another blow to Vodafone Idea, rejects tax refund appeal

Vodafone Idea continues to cling to life under the weight of crushing adjusted gross revenue (AGR) debts imposed on the nation’s telcos by the government last year, of which Vodafone Idea owed over $7 billion.

 

Last week, a spark of hope was offered to the struggling Idea, as shares bumped following a $200 million infusion from parent company Vodafone Group.

 

However, today sees that spark diminished, if not extinguished entirely, as the Indian Supreme court lands yet another heavy blow against the operator, agreeing to just $96 million of the $629 million tax refund Idea has sought.

 

The Supreme Court has become something of a nemesis for Indian telcos in recent months, vehemently rejecting their pleas for AGR relief on numerous occasions. Back in February, the Court ordered the telcos to pay their dues immediately, after the operators missed the January payment deadline and were not chased by the Department of Telecommunications. 

 

By March, partial payments were beginning to trickle in, but so were the telcos own self-assessments, recalculating the amounts they owe to a ‘more accurate’, lower amount. This, once again, infuriated the Supreme Court, who slammed the operators’ audacity as ‘contempt’.

 

Without significant relief from the government, Vodafone Idea has threatened to fold time and time again and the seemingly belligerent (if likely justified) attitude of the Supreme Court is making survival look unlikely. As a result, India could be heading towards a dreaded duopoly of Bharti Airtel and Reliance Jio.