Vodafone Idea Receives GST Demand Orders For Rs 73 Crore

In 2018, two of the biggest telecom companies in India at the time—Vodafone India and Idea Cellular—merged to form Vi. The goal of the merger was to strengthen the company’s position in the fiercely competitive Indian telecom industry, which is among the biggest and fastest-growing worldwide. Vi has a significant presence in all 22 Indian telecom circles, with a combined subscriber base of over 300 million users. The company provides both retail and enterprise clients with a broad range of services, such as voice, data, and value-added services. In order to maintain its customer base and draw in new users, Vi has been focusing on bolstering its network infrastructure and enhancing the quality of its services, even in the face of fierce competition from other big players like Reliance Jio and Bharti Airtel.

Penalty of Rs. 73 crore from GST on VI:

Debt-ridden telecom company Vodafone Idea has received Goods and Services Tax (GST) demand notices totaling Rs 73 crore from various tax offices. Nine GST offices made the demand, which comes with fines and interest, public in a regulatory filing. The business has received nine orders from different GST offices, the majority of which are related to suspected underpayment of taxes and misuse of excess input tax credit (ITC). According to the filing, on September 1, the GST office in Kolkata assessed the company the maximum penalty of Rs 33.44 crore in addition to a tax and interest demand for “Alleged Tax short paid on outward supply, excess ITC availed.”

The Noida GST office issued an order to Vodafone Idea (VIL) on September 1st, stating that the company was entitled to a “penalty of Rs 268,994,489 along with demand and interest as applicable” for its “excess availment of ITC and short tax paid for FY 2019-20.” The Patna GST office has assessed interest and demand on VIL in addition to a penalty of Rs 10.94 crore. The filing states that the company has been hit with a penalty order of Rs 4,211 from the GST office in Chandigarh, an order for Rs 1.57 crore from the Andhra Pradesh circle, an order for Rs 9.51 lakh from Odisha, and orders for Rs 50,000 and Rs 36,000 from the Himachal Pradesh office.

Vodafone Idea Ltd. stock price:

According to Vodafone, the stock of Vodafone Idea is currently trading at Rs. 15.14 per share and is still optimistic. Vodafone Idea declared that it disagrees with the tax demands and will take further action to correct or reverse the orders where the majority of the brokerage firm is neutral and holds a position for VI for the target of 22, following the Supreme Court’s decision to finally hear the telecom operator’s AGR curative petition. Given the time the issue has been pending, Citi views the SC’s action as a material development.

In 2024, Vodafone Idea’s stock dropped by 11.42% while the BSE Telecommunication index increased by 43% over the same time. Compared to the 103.80% return of the BSE Telecommunication index over the last three years, Vodafone Idea shares have increased 111%.

Conclusion: In recent times, many firms have received the GST notice, and like other companies, VI is also ready to challenge the GST demand of Rs. 73 crore.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.