Indian telecom operator Vodafone Idea has received an order imposing a penalty of 6.38 billion rupees (approximately $71 million) for alleged short payment of taxes, the company said on Thursday.
The penalty was issued by a goods and services tax authority, coming just a day after the Indian government granted the financially strained operator a partial moratorium on its adjusted gross revenue (AGR) dues. The moratorium, which freezes payments of $9.76 billion for five years, fell short of investor expectations for a full waiver.
Vodafone Idea, jointly owned by Aditya Birla Group and Vodafone Group, stated that it does not agree with the tax authority’s order and intends to pursue legal action to challenge the penalty.
Despite the announcement, shares of India’s third-largest telecom operator closed 7.8 per cent higher on Thursday, rebounding from an 11 per cent drop the previous day following the moratorium decision.
Analysts at Emkay noted that while the moratorium provides temporary relief, it is unlikely to be sufficient to resolve Vodafone Idea’s underlying liquidity challenges.
Vodafone Idea has been grappling with mounting regulatory dues and financial pressure as it seeks to stabilise operations in India’s highly competitive telecom market.
