The Supreme Court has agreed to hear a new petition filed by Vodafone Idea Ltd. seeking to quash the government’s adjusted gross revenue demands for the period up to the financial year 2016–17.
The move sparked investor optimism, with Vodafone Idea’s stock jumping as much as 12.35% on Friday, even as the benchmark S&P BSE Sensex fell 0.6%.
A bench led by Chief Justice B.R. Gavai, along with Justices K. Vinod Chandran and N.V. Anjaria, scheduled the plea for detailed consideration on Friday, September 26.
Taking note of submissions from senior advocate Mukul Rohatgi, representing Vodafone Idea, and Solicitor General Tushar Mehta, appearing for the Centre, the bench said: “We will keep it on Friday.”
Vodafone Idea’s Fresh Petition
On September 8, Vodafone Idea approached the court with a fresh plea, requesting the Department of Telecommunications (DoT) to “comprehensively re-assess and reconcile all AGR dues for the period up to FY 2016-17, following the Deduction Verification Guidelines dated 3 February 2020.”
The telecom major argued that there were errors and duplication in the government’s calculation of AGR dues and sought relief through re-verification.
Background
The AGR dispute stems from the government’s definition of telecom operators’ revenues. The Department of Telecommunications insisted that non-telecom revenues should also be included while calculating AGR, leading to massive additional liabilities for operators.
In September 2020, the Supreme Court allowed struggling telecom firms, including Vodafone Idea and Bharti Airtel, to clear their dues of about ₹93,520 crore over a 10-year period. Operators were asked to pay 10% of the total dues by March 31, 2021, and the remaining in annual instalments until March 31, 2031.
Court’s Previous Stand
In 2021, the court dismissed petitions from Vodafone Idea and Bharti Airtel seeking rectification of alleged errors in the AGR calculation. The companies had argued that arithmetical mistakes and duplication had inflated their liabilities.
However, the court had declared DoT’s demand final and barred the telcos from reopening the matter or seeking reassessment.
What’s at Stake?
Vodafone Idea has long struggled under the weight of AGR dues and mounting debt. Any relief on reassessment could significantly ease its financial burden and boost investor confidence.
The government, on the other hand, has consistently defended its demand, arguing that the AGR issue has already been conclusively settled by the Supreme Court.
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