The Supreme Court (SC) of India has asked the government to refund taxes paid for international roaming and long-distance services to Vodafone Idea (Vi). The apex court recognises that the services provided by Vodafone Idea in this case is actually the export of services and thus the taxes that the government collected for that must be refunded to the telco. Vi provided services to international telecom operators for their subscribers who were visiting India. Thus, the court has said that it is an export of services and the government must refund the collected tax, said an ET report.
The total amount that the government will refund for this is Rs 7.12 crore. While it is not a severely big amount, it can be counted as a win for the struggling telco.
Vodafone Idea Needs Funding
Vodafone Idea still very much needs funding. The third-largest telecom company in the country has been struggling for quite a while due to its financial position. Vi has been operating in losses for years now and even the merger hasn't helped. Vodafone UK has carried forward the investment of its Indian unit as nil, which doesn't look promising for Vodafone Idea.
Vodafone Idea has been trying to raise funds for a long time but has not seen any success to this day. The telco isn't getting any further credit from its vendors and the banking institutions don't want to increase their exposure to Vi. Without raising funds, Vi won't be able to launch 5G on a meaningful scale and that would render the company weak in front of its private competitors.
The Aditya Birla Group (ABG) had made promises to the Indian government to turn things around for Vi by successfully raising funds once the government converted the interest dues into equity.