Supreme Court Allows Government To Reconcile All Vodafone Idea Dues Till FY2016-17

The Supreme Court on Monday allowed the government to reconcile all Vodafone Idea dues till fiscal 2016-17, reported Bloomberg. The Supreme Court has modified its Vodafone Idea AGR Case order issued on Oct. 27, the Legal Counsel for the company told NDTV Profit.

The Vodafone Idea Legal Counsel also added that the new order will be uploaded by Tuesday. Mahesh Agarwal while talking to NDTV Profit said that the telecom company will make the representation to the government once the order is out. He further added that there were lots of mistakes in the calculation of the AGR dues. According to him the principal amount may go down once the amount is reconciled.

NDTV Profit had earlier reported that the government is considering offering limited relief to Vodafone Idea by reviewing and correcting potential duplicate entries and calculation errors in the company's additional adjusted gross revenue (AGR) dues.

The apex court this week allowed the central government to reconsider issues related to Vodafone Idea's adjusted gross revenue dues raised for the period up to fiscal year 2016-2017, offering a potential breather to the debt-laden telecom operator.

The order's Point 7 clarified that any relief package from the government can only be extended to the company and not to other players.

For Vodafone Idea and Indus Towers, Point 6 of the order stated that any claim is restricted only to the additional AGR demand raised for the period up to the financial year 2017.

Analysts believe this means even if relief is granted, it would apply only to the newer AGR demand of about Rs 9,450 crore, which represents just 12% of VI's total AGR dues and about 5% of its overall debt.

Market participants said the judgment dims hopes of broad-based relief for the telecom sector, reinforcing concerns around high leverage and regulatory uncertainty.

In September, the troubled carrier sought a waiver of penalty and interest on adjusted gross revenue demand of Rs 9,450 crore raised by the Department of Telecommunications, contending that a substantial portion of the demand pertained to the pre-FY17 period already settled by the apex court in 2020.

The company argued that the demand goes beyond the scope of the apex court's earlier ruling on AGR liabilities, as per reports. Of the total dues, Rs 2,774 crore pertains to the post-merger Vodafone Idea entity, while Rs 5,675 crore relates to liabilities of the pre-merger Vodafone Group.

The government has become the single largest shareholder in Vodafone Idea after acquiring shares worth Rs 36,950 crore in lieu of outstanding spectrum auction dues in March. Earlier, the government had acquired around 33% stake in 2023 in lieu of statutory dues worth over Rs 16,000 crore.