The amounts stuck in litigation for Vi alone is more than ₹22,000 crore, they said.
The government is evaluating developing a mechanism similar to ‘Vivaad se Vishwas’ (VSV) to reduce litigation as part of its relief and reforms measures for the cash-strapped telecom sector, as reported by ET in its October 5 edition.
“The Department of Telecommunications (DoT) has raised demands of about ₹15,000 crore on Vodafone Idea alone for a one-time spectrum charge (OTSC) alone,” a person aware of the matter told ET.
The company has said OTSC accruals till the end of March this year were ₹4,389.8 crore, which have been provided for it in its financials.
Some of the other ongoing cases between DoT and Vi include those around return of bank guarantees (₹3,322 crore), and penalties relating to Idea Cellular’s 2008 acquisition of Spice Communications and around 3G intra-circle roaming agreements.
In addition, the department had on September 30 demanded ₹2,000 crore from Vi and ₹1,050 crore from Airtel for allegedly not providing points of interconnect to then entrant Reliance Jio in 2016. It is also widely expected to land up in the courts. Airtel on that day had made it clear that it will challenge the demand.
On October 5, DoT told the Supreme Court that it wants to reconsider its appeal against a telecom tribunal ruling backing telcos’ argument that OTSC should be levied prospectively.
This stance underlined the government’s intention that it wants to reduce litigation in the telecom sector as part of continuing efforts to improve the health of operators.
DoT, though, is still working out details of the proposed mechanism for any out-of-court settlement, with meetings at the highest levels of the government.
“That is also something which the telcos want, but we need time to figure out how best to resolve this,” a person involved in the process told ET.
The VSV scheme was launched in March 2020 to reduce income tax-related litigation, while generating timely revenue for the government and benefiting taxpayers. The scheme allowed taxpayers to clear their outstanding dues by paying only the tax component of the overall demand by the authorities, with the government waiving interest and penalty amounts.
The catalyst for the second wave of reforms in the telecom sector is a shift in the government’s stance towards the telecom industry – from a revenue generator to a catalyst for economic growth.
To this effect, the government announced wide-ranging reforms on September 15, which included abolishing spectrum usage charge (SUC) prospectively and giving telcos the option to defer payment of AGR and spectrum fees by four years.
Other major measures include the option given to telcos for converting dues and interest into government equity, a drastic reduction in the requirement for bank guarantees, and a facility to surrender unused spectrum.
