Vodafone - Corporate Updates

Vodafone Idea (Vi) has formally submitted a proposal to the Department of Telecommunications (DoT) requesting a fresh recalculation of its Adjusted Gross Revenue (AGR) dues. The telecom operator claims that previous assessments included arithmetic errors and duplicate entries, which significantly inflated its liability. Alongside the recalculation request, Vi has sought a one-time waiver of penalties and interest linked to these dues.

The company believes that rectifying these discrepancies could reduce its outstanding AGR payments by nearly half, easing its financial burden and improving liquidity. Vodafone Idea estimates that its current pending liability could be lowered by approximately ₹45,000–50,000 crore if the recalculation is accepted.

The proposal is not only aimed at financial relief but also at enabling strategic growth initiatives. Vi plans to raise around ₹25,000 crore from banks and financial institutions to support its planned capital expenditure of ₹50,000–55,000 crore for rolling out 5G services across India. This capital infusion would strengthen the company’s network infrastructure and enhance service offerings in the competitive telecom market.

Industry experts note that if the government approves the proposal, it could transform Vodafone Idea’s operational outlook. By reducing cash-flow pressure and freeing up capital, the company would be better positioned to invest in technology upgrades, expand 5G coverage, and maintain market competitiveness. Additionally, the restructuring of dues could open possibilities for government equity dilution, further supporting corporate flexibility and investor confidence.

Vodafone Idea has been navigating significant financial challenges since the Supreme Court’s ruling on AGR dues, which has affected several Indian telecom operators. The current proposal reflects the company’s proactive approach to regulatory engagement and its commitment to sustainable growth. Stakeholders, including investors, customers, and regulators, are closely monitoring the development, which has the potential to reshape Vi’s financial stability and accelerate its transition into the 5G era.

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The Income Tax Department has withdrawn the ₹8,500-crore transfer pricing case against Vodafone India Services, in connection with sale of its Ahmedabad-based call centre business, 3 Global Services, to Hutchison Whampoa Properties (India) during the financial year 2008.
The Commissioner of Income Tax submitted a request to withdraw the case before a Supreme Court bench headed by Chief Justice B.R. Gavai, which granted permission for the withdrawal.

The bench ruled that the Income Tax Department had exceeded its jurisdiction by applying transfer pricing provisions without any cross-border element involved. As a result, the ₹8,500-crore tax demand was set aside.

The withdrawal comes days after the top ordered the union government to extend relief to Vodafone Idea Ltd on issues relating to its AGR dues.

In 2008, the I-T department alleged that Vodafone had engaged in an undisclosed international transaction. Tax officials had claimed the company had underreported its income by ₹8,500 crore through transfer pricing adjustments. The case reached the Supreme Court in 2016, but there was little movement for years before it was withdrawn on Monday.

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