New Delhi: Cash-strapped telecom operator Vodafone Idea (Vi) continues to face regulatory headwinds as it was slapped with a ₹4.16 crore penalty by GST authorities in West Bengal. The penalty adds to a series of recent tax demands the company has received across different circles, further complicating its financial recovery path.
In a regulatory filing on Monday, the company disclosed that the Deputy Commissioner, Large Taxpayer Unit (LTU), West Bengal, passed an order under Section 73 of the CGST/SGST Act, 2017. The tax authority has alleged that the company availed excess Input Tax Credit (ITC) and made certain tax payments under the “wrong head,” leading to the demand for penalty, interest, and tax.
The specific penalty amount confirmed in the order stands at ₹4,15,51,496. This development comes just days after the company received similar notices from tax authorities in Rajasthan and Maharashtra, signaling intensified scrutiny of the telco’s historical tax filings.
Despite the demand, Vodafone Idea has taken a defiant stance, stating it will challenge the order. “The Company does not agree with the Order and will take appropriate action(s) for rectification/reversal of the same,” Vi stated in its exchange notification.
The company also clarified that the maximum financial exposure is limited to the tax demand, interest, and the specific penalty amount mentioned. Industry analysts note that while the individual penalty amount is relatively small for a company of Vi’s scale, the cumulative effect of multiple tax disputes across various states remains a concern for investors.
Vodafone Idea’s stock has been under watch as it navigates a complex web of liabilities, including massive AGR (Adjusted Gross Revenue) dues and spectrum payments. The company maintains that this specific GST order does not disrupt its day-to-day operations.
However, the recurring nature of these notices highlights the persistent litigation challenges in the telecom sector. The company’s legal team is currently reviewing the West Bengal order to file an appeal before the appropriate appellate authority.