Vodafone Idea and Bharti Airtel Will Get No Tax Relief For AGR Dues

Bharti Airtel and Vodafone Idea, combined have to pay dues worth Rs 89,000 crore to the DoT in the name of license fees, and spectrum charges

Highlights
  • Vodafone Idea has dues of Rs 53,000 crore
  • Bharti Airtel has dues worth Rs 35,500 crore
  • The finance ministry has turned down requests of the telecom companies

The telecom operators, mainly Vodafone Idea and Bharti Airtel have been looking hopefully towards any sigh of relief from the government for the AGR dues which they have to pay in the coming month of January 2020. One of the avenues of relief which the telecom companies were expecting was of the tax. However, crashing the hopes of these telecom companies, the Goods and Services Tax council has rejected the request for refund of input tax credit worth Rs 36,000 crore. Sushil Kumar Modi disclosed the information to ETTelecom. The total dues on the telecom sector presently remains at Rs 1.4 lakh crore solely from the latest AGR verdict by the Supreme Court which said that the telecom companies would have to consider the non-core operations as well for calculating the AGR.

vodafone-idea-airtel-tax-relief

GST Council Turns Down Request for Refund

“The GST Council has not considered this issue, and even if it does come up for consideration, it will not be accepted,” Modi said. He also added that with such a huge amount, there is no question of a refund. It is worth noting that the telecom companies have been requesting the government to issue a refund on their input tax credit or either asking them to adjust the amount against their statutory dues. The telecom companies have already filed plenty of requests with the finance ministry. Currently, the input tax credit which is with the finance ministry already includes Rs 18,000 crore from Reliance Jio, Rs 10,000 crore from Bharti Airtel and around Rs 8,000 crore from Vodafone Idea. The refund that the telecom operators are looking for are on the inputs such as the equipment used to provide telecom services.

Dues to be Paid in January for Telecom Companies

Both Bharti Airtel and Vodafone Idea, combined have dues worth Rs 89,000 crore to pay to the Department of Telecommunications (DoT). These dues are based on the license fees, the spectrum usage charges (SUC) that have been pending for more than 15 years. The legal matter which concluded with the Supreme Court verdict back in October has been going on since the last decade and a half. In its order, the Supreme Court had remarked that the dues are to be paid by January. Bharti Airtel and Vodafone Idea are scraping various sources to pay the dues. Bharti Airtel has even announced plans of raising funds to pay off these AGR dues. If these telecom companies would have received the input tax credit refund from the finance ministry, then there would have been a sight of relief for these telcos in the case of AGR dues.

The telecom operators have repeatedly sent out requests to the finance ministry asking for the refunds on the input tax credit. But, Sushil Modi remarked again “There is no discussion on it. Such a request will not be entertained at all within GST Council, at any level.”

Vodafone Idea Might Shut Operations

It is worth noting that the telecom companies are facing a severe crunch. The only relief for the telecom companies has come in the form of two years of payment moratorium for Rs 42,000 crore. Apart from that, the telecom operators, mainly Bharti Airtel and Vodafone Idea, will have to pay the dues in January. Vodafone Idea has already said that if no relief comes its way, then it would be time for the telecom operator to shut operations.

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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