airtel: Vodafone Idea, Airtel blocked 42,000 crore in cases against the government

(Vi) and Bharti together have more than 42,000 crore yen stranded in litigation against the government and the proposed out-of-court settlement mechanism could significantly reduce their payments, people familiar with the matter said.

Amounts blocked in litigation for Vi alone are over 22,000 crore, they said.

The government plans to develop a mechanism similar to ‘Vivaad se Vishwas’ (VSV) to reduce litigation as part of its relief and reform measures for the cash-strapped telecommunications sector, ET reported. in its October 5 edition.

“The Department of Telecommunications (DoT) has raised demands of around 15,000 crore on Vodafone Idea alone for a single spectrum fee (OTSC),” a person familiar with the matter told ET.

The company said the OTSC accruals up to the end of March this year were 4,389.8 crore, which was provided to it in its financial statements.

Other pending cases between DoT and Vi include those concerning the return of bank guarantees (3,322 crore) and penalties related to the acquisition of Spice Communications by Idea Cellular in 2008 and the intra-circle roaming agreements. 3G.

In addition, on September 30, the department demanded 2,000 crore from Vi and 1,050 crore from Airtel for allegedly failing to provide interconnection points to newcomer Reliance Jio in 2016. It is also expected to find itself in front of the courts. Airtel that day had made it clear that it would challenge the request.

On October 5, the DoT told the Supreme Court that it wanted to reconsider its appeal against a telecommunications tribunal ruling supporting the carriers’ argument that the CSTO should be viewed prospectively.

This position underscored the government’s desire to reduce disputes in the telecommunications sector as part of the ongoing efforts to improve the health of operators.

The DoT, however, is still working on the details of the proposed mechanism for any amicable settlement, with meetings at the highest levels of government.

“This is also something the carriers want, but we need time to figure out how best to fix this problem,” a person involved in the process told ET.

The VSV scheme was launched in March 2020 to reduce income tax litigation, while generating timely revenue for the government and for the benefit of taxpayers. The scheme allowed taxpayers to settle their debts by paying only the tax component of the authorities’ aggregate demand, with the government waiving interest and penalties.

The catalyst for the second wave of reforms in the telecommunications sector is a shift in the government’s stance towards the telecommunications industry – from a revenue generator to a catalyst for economic growth.

To this end, the government announced on September 15 comprehensive reforms, including the prospective abolition of spectrum user fees (SUC) and the possibility for telecommunications operators to defer payment of AGR and user fees. four-year-old specter.

Other important measures include the ability for telecom operators to convert dues and interest into government equity, a drastic reduction in bank guarantee requirements, and an ability to cede unused spectrum.

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