Bharti Hexacom Gets Relief From Rajasthan High Court In Rs 55 Crore Tax Dispute

Bharti Hexacom Ltd. has announced that the Rajasthan High Court has passed an order regarding a tax demand worth Rs 54.6 crore in the favour of the company. The licensed operator of wireless and fixed-line services had received a show cause notice from the Commissioner of Central Goods and Services Taxes, Jodhpur for the period between 2006 to 2013, as per an exchange filing on Saturday.

The company had challenged the order dated Feb. 13, 2017 before the Customs, Excise and Service Tax Appellate Tribunal, the filing said. The demand included principle tax and penalty amount of Rs 49.21 crore and Rs 5.39 crore, respectively.

The CESTAT had reversed the order by the adjudicating authority and held that Central Value Added Tax credit can be availed by the company on excise duty paid on tower parts and shelters. In response the department filed an appeal against the judgement before the Rajasthan High Court.

However, the departments appeal was dismissed by the high court.

Bharti Hexacom in March received a 'buy' rating from Motilal Oswal Financial Services Ltd, as the brokerage initiated coverage while picking the stock as a preferred play on India's wireless growth story. Motilal Oswal analysts have set a target price of Rs 1,625 apiece for the counter, implying an upside potential of 22%.

Bharti Hexacom is a licensed operator of wireless and fixed-line services under the Airtel brand in the Rajasthan and Northeast circles of India. Hence, it's providing a great exposure to two high-growth businesses, Motilal Oswal Financial Services pointed out.

In these regions, there's lower penetration of telecommunication devices and internet, which makes the potential for Bharti Hexacom to grow a few percentage points faster than Bharti Airtel Ltd., it said.

Shares of Bharti Hexacom closed 0.80% higher at Rs 1,465.95 apiece, compared to a 1.49% decline in benchmark NSE Nifty 50 on Friday.