Mumbai, February 5, 2025 – Vodafone Idea Limited has disclosed that it has received multiple orders under the
Central Goods and Services Tax Act, 2017 (CGST Act), imposing penalties and tax demands. The company, however, does not agree with these orders and plans to pursue rectification or reversal of the imposed liabilities.
Key Orders Received:
Vodafone Idea has received three separate orders from different tax authorities, collectively amounting to over ₹10.98 crore in penalties, along with additional tax demand and interest.
| Issuing Authority | Nature of Allegation | Penalty Amount (₹) | Date of Order |
|---|
| Assistant Commissioner, CGST, Noida | Short payment of tax for FY 2017-18 | ₹12,39,265 + Interest | 04-Feb-2025 |
| Superintendent, CGST, Jammu | Excess availment of Input Tax Credit for FY 2017-18 | ₹10,00,000 + Interest | 04-Feb-2025 |
| Additional Commissioner, CGST, Delhi East | Short payment of tax for FY 2017-18 | ₹10,86,10,272 + Interest | 04-Feb-2025 |
The orders have been issued under
Section 74 of the CGST Act, which pertains to tax evasion, incorrect utilization of tax credits, and other serious violations.
Company's Stand:
Vodafone Idea maintains that it does not agree with the conclusions drawn by the authorities and will take appropriate legal or procedural actions to challenge these orders.
Financial and Operational Impact:
The company has stated that the total financial impact will be limited to the
tax demand, interest, and penalty levied. However, since Vodafone Idea disputes these claims, the actual outflow remains uncertain until the resolution of the appeals.
Strategic Implications:
This development comes as Vodafone Idea continues to struggle with its financial challenges, including its high debt burden and ongoing efforts to raise capital for business operations and network expansion.
Investor Outlook:
While regulatory penalties are not uncommon in the telecom sector, Vodafone Idea’s existing financial constraints make the resolution of these disputes critical for its cash flow management. Investors will closely watch how the company navigates this legal challenge and whether it successfully reduces or reverses these liabilities.
