In a significant development for Vodafone Idea (Vi), the Supreme Court of India has directed the government to refund taxes collected for international roaming and long-distance services provided by the telecom operator. The apex court recognizes these services as exports, thus entitling Vi to a tax refund.
Vi’s Victory in Tax Refund Battle
The Supreme Court’s ruling requires the government to refund approximately Rs 7.12 crore, acknowledging Vi’s role in providing services to international telecom operators for their subscribers visiting India as an “export of services.”
Financial Struggles of Vodafone Idea
Vi’s need for funding remains a pressing concern. As the third-largest telecom company in India, Vi has faced persistent financial challenges, reporting losses over several years despite the merger between Vodafone and Idea. To compound these issues, Vodafone UK has not invested further in its Indian unit, further complicating Vi’s financial prospects.
Desperate Quest for Funding
Vi has embarked on a protracted quest to secure funding, with limited success thus far. The company has encountered difficulties in obtaining credit from vendors, while banks have been hesitant to extend their exposure to the struggling telecom provider. This challenging financial landscape presents hurdles for Vi’s ambitions to roll out 5G services on a meaningful scale, potentially impacting its competitive standing in the industry.
Aditya Birla Group’s Pledge
The Aditya Birla Group (ABG), Vi’s parent company, had previously committed to revitalizing the telecom operator by raising necessary funds once the government converted interest dues into equity. However, Vi’s struggle for financial stability continues despite these efforts.
