Court tells Airtel and Vodafone Idea: you still owe $13bn but you can pay over 15 years
India’s Supreme Court has said it will not step back from its demand that two major telcos must pay their back taxes of US$13 billion.
But at a hearing yesterday the court (pictured) did seem to offer some relief in that the payments can be staggered over 15 years. The court said that Bharti Airtel and Vodafone Idea’s request for 20 years was too long.
At the hearing, the court said there was “no going back” on the demand by India’s Department of Telecom (DoT) for the taxes, which are due on the basis of adjusted gross revenue (AGR).
As reported in Capacity yesterday, the DoT says that Bharti Airtel owes the equivalent of $4.7 billion in tax on AGR, while Vodafone Idea owes $6.1 billion.
The court hearing was adjourned until 10 August. But before adjourning it turned to India’s effectively defunct mobile carriers, including Aircel, Reliance Communications (RCom), once the sister company of Global Cloud Xchange (GCX), and Sistema Shyam Teleservices.
These have disappeared from the market after Reliance Jio – a separate company from RCom – started up, offering 4G-only services at low rates and forcing mergers and closures.
Justice Arun Mishra told these companies that they need to submit their insolvency details within seven days. The court will consider their future on 19 August, he added.
The court said that some of those companies together owe the equivalent of up to $5 billion, and it wants to check the basis of their insolvency.
GCX was split off from RCom in 2019 and is now separately owned. Last week the company announced that former Colt CEO Carl Grivner has become its CEO.
But RCom told India’s National Company Law Tribunal (NCLT) in January that it would take until the end of February to dispose of its assets. That process appears still to be in limbo. Reports say it has had bids of $200 million for its remaining assets.