Vodafone Idea has reportedly challenged the department of telecom’s calculation behind additional AGR dues levied on the company.
The telecom operator has sought additional demands to be set aside.
Vodafone Idea knocked on the Supreme Court’s door against the adjusted gross revenue (AGR) related calculation and has asked for recalculation. The telecom firm, via a writ petition, challenged the calculation behind its AGR dues and sought relief from additional tax demands made by the Department of Telecom (DoT) for dues up to the financial year 2017 to be set aside, MoneyControl reported.
The company has reportedly argued that the tax demand goes beyond the scope of the apex court’s earlier ruling on AGR dues. Recently, the DoT has sought an additional demand of ₹2,774 crore for FY19. Vi contested the calculation of these demands, citing some of the amounts have been added twice.
The AGR calculation has been a long-standing contention between telecom companies, including Vi, and the government. AGR is the basis for revenue sharing between telecom companies and the government and is a significant factor in determining the licensing and spectrum usage fees. The primary contention stemmed from the definition of AGR. While the telecos argued that it should only include core telecom revenues, the government contested that it should include all streams of revenues for operators, including non-telecom services. In 2019, the apex court ruled in favour of the government, resulting in massive AGR-driven dues for telecom companies.
The financially troubled telecom firm argued that the additional demands raised by the DoT will further increase its burden and are likely to hinder its plan to strengthen its existing 4G coverage and delay 5G rollout. This comes around a time when its rivals like Reliance Jio and Bharti Airtel are investing heavily in 5G rollout.
Vi reportedly owes around ₹83,400 crore in AGR dues to the government and is scheduled to pay ₹18,000 crore annually starting from March 2026. To lessen the liability, the telecom operator is eyeing to raise funds, and at the same time, has reached out to the government for additional relief. The government has already converted around ₹36,000 crore in AGR dues into equity, raising its stake in the company to 49%.
