Mumbai, February 1, 2025 – Vodafone Idea Limited (NSE: IDEA | BSE: 532822) has disclosed receiving an order under the Central Goods and Services Tax Act, 2017, confirming a penalty of ₹1,300.2 crore, including demand and interest, from the Deputy Commissioner of State Tax. The company has strongly disagreed with the order and plans to take appropriate action against it.
Regulatory Action Overview
The tax order, dated January 31, 2025, was issued under Section 74 of the Central GST Act, 2017, and the Maharashtra GST Act, 2017. The case revolves around an alleged non-payment of tax under the reverse charge mechanism, a GST provision where recipients of goods or services must pay tax directly to the government.| Particular | Details |
|---|---|
| Authority Issuing the Order | Deputy Commissioner of State Tax |
| Nature of Action | Penalty under Section 74 of CGST & MGST Act |
| Penalty Amount | ₹1,300.2 crore (including interest and demand) |
| Date of Order | January 31, 2025 |
| Allegation | Non-payment of tax under reverse charge basis |
| Company's Response | Disagrees with the order, plans to challenge it |
Potential Financial and Operational Impact
Vodafone Idea has acknowledged that the penalty could have a significant financial impact, depending on the outcome of its appeal. However, the telecom giant has asserted that it does not agree with the tax demand and will take legal recourse to contest the order.Company’s Response and Next Steps
In its regulatory filing with the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), Pankaj Kapdeo, Company Secretary of Vodafone Idea, stated that the company will pursue appropriate actions against the order in accordance with legal provisions.This development adds to the ongoing financial challenges of Vodafone Idea, which has been grappling with debt and fundraising efforts in recent years. The company has been in the process of securing capital infusion to strengthen its balance sheet and meet operational requirements.
Investor Implications
With this penalty, investors will closely watch Vodafone Idea’s next legal moves and whether the company secures a stay or reduction in penalty through appeals. Any adverse impact on cash reserves could affect future business expansion and network investments.