Vodafone seeks 3-year moratorium
Vodafone Idea has paid just Rs 3,500 crore of the Rs 56,709 crore it owes to the government
- Published 27.02.20, 1:22 AM
- Updated 27.02.20, 1:22 AM
- 2 mins read
Debt-laden Vodafone India has sought a three-year moratorium and an adjustment of a Rs 8,000-crore GST refund from the government against the gargantuan amount of Rs 56,709 crore it owes to the telecom department in statutory AGR dues.
In a letter to the telecom and finance ministries, the company has sought to defer the payment schedule of the dues.
It has urged the government to reduce the licence fee to 3 per cent from the current 8 per cent and the spectrum use charges to one per cent from 3 per cent as the sector faces high taxation, sources said.
The operator has also sought the immediate implementation of a floor price to help telecom companies double their revenue.
After the moratorium period, Vodafone Idea has proposed it would pay the adjusted gross revenue (AGR) dues over 15 years at a simple interest rate of 6 per cent.
Vodafone Idea has paid just Rs 3,500 crore of the Rs 56,709 crore it owes to the government.
Vodafone Idea’s move comes a day before a meeting of the Digital Communciations Commission, the highest decision making authority of the DoT, which is likely to discuss the dues and their impact on the operators and the sector.
The meeting of the commission follows hectic parley last week between Vodafone Idea and Bharti Airtel officials with government officials. Both Vodafone Idea chairman Kumar Mangalam Birla and Airtel chairman Sunil Mittal had met finance minister Nirmala Sitharaman.
After the meetings, the finance ministry and DoT have started discussions on possible relief measures to prevent the sector from becoming a duopoly with Reliance Jio and Bharti Airtel as the operators.
Several proposals are being discussed to provide the sector with immediate relief such as setting up a fund which will lend money to the operators at a concessional rate to repay their dues.
Other options include offering the companies a revised payment plan and a deferred payment of penalties and interests.
The DoT has also asked all operators to speed up self-assessment of their dues and submit documents supporting their calculations even after Bharti Airtel, Tata Teleservices and Vodafone Idea had made partial payments last week.
The move comes amidst the ministry itself working on final adjusted gross revenue dues that service providers have to pay as it has detected variation in the accounting practices adopted by the different circle offices.
The unpaid dues of the operators stand at Rs 1.47 lakh crore, comprising Rs 92,642 crore in unpaid licence fee and Rs 55,054 in spectrum use charges. Airtel and Vodafone Idea account for about 60 per cent of the dues that include interest and penalty for late payments.
Tata Teleservices has paid Rs 2,197 crore of its dues of Rs 14,197 crore, claiming as full and final settlement. Tata Sons chairman N. Chandrasekaran had met IT minister Ravi Shankar Prasad on Tuesday. He also met telecom secretary Anshu Prakash.
IT Act change
The government is looking to revamp the 20-year old IT Act to keep pace with the advances in technology and bring in a stronger framework around issues such as cybercrime, IT minister Ravi Shankar Prasad said on Wednesday. Prasad said the new act would also factor in issues such as the Supreme Court’s judgment on privacy and protection.