India’s Supreme Court asked operators to provide payment schedules on clearing adjusted gross revenue (AGR) taxes, raising expectations Vodafone Idea and Bharti Airtel may have more time to pay massive outstanding fees, The Economic Times (ET) reported.
In addition to detailing the time needed to pay outstanding sums, operators must explain what securities they can offer as guarantees before the court’s next hearing on 18 June, the newspaper wrote. The court will then rule on what is a reasonable timeframe for payments.
India’s solicitor general Tushar Mehta warned attempts to recover the taxes too quickly would imperil the telecoms sector and could force some operators into liquidation.
The government previously suggested extending the timeline for outstanding fees by up to 20 years.
In October 2019, the high court ruling [1] broadened the definition of AGR, placing INR933 billion ($12.3 billion) in additional licence and spectrum usage fees on operators.
First round
Vodafone Idea has pushed the government for more time [2] to pay, arguing it needs financial relief to stay in business.
The operator said it owed INR215 billion [3] based on a self-assessment of its liabilities, compared with the INR530 billion the DoT ordered it to pay. In March the operator claimed to have paid the full principal [4] amount owed.
Rival Bharti Airtel pegged the amount owed at INR130 billion [5], which it paid along with an “extra” payment of INR50 billion. The DoT estimates its liability at INR356 billion.
Both operators are considering using their spectrum, other assets and tax refunds as guarantees, ET said.
[1] https://www.mobileworldlive.com/asia/asia-news/vodafone-idea-warns-of-damage-from-court-ruling/
[2] https://www.mobileworldlive.com/asia/asia-news/vodafone-idea-pleads-for-government-relief/
[3] https://www.mobileworldlive.com/asia/asia-news/vodafone-idea-tipped-for-additional-agr-payment/
[4] https://www.mobileworldlive.com/asia/asia-news/vodafone-idea-makes-headway-in-agr-payment/
[5] https://www.mobileworldlive.com/asia/asia-news/india-to-reassess-operator-agr-liabilities/
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