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GST Council to take up Rs 35,000 crore refund for telecom companies

According to the sources, out of the Rs 35,000 crore refund, about Rs 18,000 crore is pending for Reliance Jio, about Rs 10,000 crore for Bharti Airtel, and Rs 7,000 crore for Vodafone Idea.

Published: 26th November 2019 11:52 AM  |   Last Updated: 26th November 2019 11:52 AM   |  A+A-

GST Council

Image used for representational purpose only. (Photo | PTI)

Express News Service

NEW DELHI: With the telecom companies struggling to pay spectrum dues, the finance ministry, which is sitting on Input Tax Credit refund worth Rs 35,000 crore of telecom companies, is likely to refer the matter to the GST Council.

"There is Input Tax Credit worth Rs 35,000 crore pending for the three major telecom companies. Department of Telecom (DoT) has flagged the issue to the finance ministry and soon they will refer this matter to the GST Council," a senior finance ministry official said.

According to the sources, out of the Rs 35,000 crore refund, about Rs 18,000 crore is pending for Reliance Jio, about Rs 10,000 crore for Bharti Airtel, and Rs 7,000 crore for Vodafone Idea. The telecom companies have already written to the DoT, and once the refund is done, a large part of their liquidity problems will be solved.

Earlier, the Committee of Secretaries, headed by Cabinet Secretary Rajiv Gauba, had suggested that Goods and Services Tax issues should be resolved by the GST Council. The telecom industry has been urging the government to adjust the refunds against their spectrum dues. The Department of Telecom has already written to the finance ministry in this regard.

However, the revenue department has opposed the request to adjust the refund against the spectrum fee. Even the Income Tax Department owes Vodafone Idea Rs 7,000 crore in tax refund and has said that adjusting the refund will make it difficult for the tax department to recover pending dues.

On October 24, the Supreme Court ordered the telcos to pay Rs 1.4 lakh crore in past statutory dues after including non-telecom revenues in the calculation. The industry then wrote to the finance ministry, saying that this would kill the sector.

The Cabinet, in its last meeting on November 20, deferred payment of the spectrum dues for two years to help an industry ravaged by an years-long price war. The move will give a Rs 42,000-crore relief to Bharti Airtel, Vodafone Idea and Reliance Jio.

The government is unlikely to intervene in the Supreme Court-mandated statutory payments, and on Monday it disbanded the Committee of Secretaries headed by Gauba.



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