There’s continued fallout from last week’s insistence by the Indian Supreme Court that telecommunications companies judged to owe adjusted gross revenue (AGR) dues should not have delayed payment beyond the 23 January deadline while awaiting the hearing of a modification petition.
Vodafone Idea apparently told the Supreme Court on Monday that it can pay only about $350 million of the total owed to the government and will follow it up with another $140 million by 21 February. It’s worth remembering that these payments are only a portion of Vodafone Idea’s estimated principle AGR dues. The actual overall cost will be close to an eye-watering $7.5 billion.
Last week’s judgement offered no relief at all and castigated the company for the delayed payment and the Department of Telecommunications (DoT) for permitting that delay by holding back on coercive action. In response the DoT has decided to get tough, telling all the telecommunications companies involved to make AGR payments immediately. If they do not, it has said, "necessary action will be taken in terms of provisions of the License Agreements".
The Vodafone Idea part-payment proposal has, however, been rejected by the Supreme Court, which continues to insist that all involved clear their dues – or a substantial part of their dues – before the next date of hearing on 17 March.
The court had on 24 October last year ordered that non-telecom revenues should be included in the AGR for calculating statutory dues such as license fee and spectrum charges, leaving Vodafone Idea in particular with a massive bill.
What is not entirely clear is whether the modification petition, allowing more time to make the payments, is going to be of any use to Vodafone Idea. Even if it is eventually granted, Vodafone Idea is required to pay some or all of the moneys owed well before the petition’s hearing date of 17 March.