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Vodafone Idea seeks over Rs 8,000 crore GST refund as AGR relief

Vodafone Idea has, until now, paid just Rs 3,500 crore of its pending AGR dues in two tranches. According to DoT estimates, the telecom major owes as much as Rs53,038 crore in AGR liabilities.

Published: 27th February 2020 03:08 AM  |   Last Updated: 27th February 2020 12:47 PM   |  A+A-

Vodafone logo used for representation

Vodafone logo used for representation (File Photo | AP)

By Express News Service

NEW DELHI: Beleaguered telecom major Vodafone Idea Ltd on Wednesday reiterated requests for relief from the Department of Telecom (DoT), seeking a GST refund of Rs 8,000-odd crore, among other relief measures.

Sources confirmed that the requests have been made in a letter written to the department stating that the company has also requested the implementation of a floor price to revive the struggling sector.

ALSO READ: Tata Sons chief meets telecom minister Ravi Shankar Prasad amid AGR crisis

The sector’s top decision-making body — the Digital Communications Commission — is likely to meet on the issue of granting a relief package to the sector on Thursday, sources added. DoT officials had met last Sunday to discuss measures to provide relief to the ailing sector.

Among the reliefs sought by Vodafone Idea is a request to adjust Rs 8,000 crore in Goods and Services Tax (GST) refunds from its AGR dues and a three-year moratorium on AGR dues, while reiterating industry-wide requests to reduce the license fees to 3 per cent from 8 per cent and Spectrum Usage Charges (SUC) from 3 per cent to 1 per cent.

Vodafone Idea has, until now, paid just Rs3,500 crore of its pending AGR dues in two tranches. According to DoT estimates, the telecom major owes as much as Rs53,038 crore in AGR liabilities.

ALSO READ: Nobody wants to kill telecom sector, says SBI chief

However, sources say that the company is likely to claim a much lower liability when it submits its final calculations to the DoT and the Rs8,000 crore GST refund will help it offset a substantial portion of its dues.

AGR is the basis on which levies like licence fees and spectrum usage charges are calculated and the Supreme Court had ruled last year that this should include proceeds from licence holders’ non-telecom businesses too. 

Apart from Vodafone Idea, the most impacted by the order are Bharti Airtel and Tata Teleservices, who owe Rs 35,586 crore and Rs13,823 crore respectively, according to the telecom department. 

ALSO READ: Government to verify AGR math of all telecom companies via 'test checks'

The past two weeks have seen several meetings between industry leaders like Vodafone Idea’s Kumar Mangalam Birla, Airtel’s Sunil Bharti Mittal and Tata Group’s N Chandrasekaran and top government officials on possible relief measures for the sector.

Moody’s says AIrTEL will live

Meanwhile, Moody’s on Wednesday said Bharti Airtel has the financial capacity to withstand the payout of Rs 35,300 crore in AGR dues and that cash payment will not cause major deterioration in its credit quality.

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