Vodafone Idea AGR case: Supreme Court allows Centre to review dues, shares surge over 9% – key highlights

The Supreme Court on Monday, 27 October, allowed the central government to address Vodafone Idea's grievances and re-evaluate the demand for adjusted gross revenue (AGR) dues without court intervention.

The top court's verdict comes after Vodafone Idea last month submitted a petition challenging the Department of Telecommunications’ (DoT) demand for an additional ₹9,450 crore in AGR dues. These dues are calculated based on licence fees and spectrum charges that telecom companies are required to pay to the government.

Here are the key highlights from the Vodafone-Idea AGR case- from the Supreme Court verdict to the share price update.

What did the Supreme Court say?

A bench led by Chief Justice B R Gavai and Justice K Vinod Chandran said that any relief granted to the telecom operator falls under policy matters. The court cited the government's equity stake in Vodafone Idea and the interests of 20 crore subscribers across the country.

The Supreme Court noted that the issue falls under the Union’s policy jurisdiction. The bench clarified that there is no legal barrier preventing the Centre from re-evaluating the matter and making a suitable decision.

Vodafone Idea's share price

Vodafone Idea's share price surged more than 9% Monday after the Supreme Court's verdict. The shares rose 9.45% to ₹10.53 apiece on the BSE during intraday trading.

What did Vodafone Idea ask for?

In its 8 September petition, Vodafone Idea contested DoT's demand for an additional ₹9,450 crore and sought a waiver of interest and penalties. The company claimed that the disputed parts of the dues have not yet been settled.

The fresh demand includes ₹2,774 crore from DoT for Idea Group and Vodafone Idea (post-merger in August 2018) and ₹6,675 crore from Vodafone Group (pre-merger), the petition said.

In 2020, the Supreme Court locked Vodafone Idea’s AGR dues up to 2016-17 based on DoT’s calculations, saying that no self-assessment or re-assessment would be allowed. However, Vodafone Idea now claims that DoT is seeking additional payments for the period up to 2018-19.

Vodafone-AGR case timeline

The Supreme Court initially scheduled the hearing of the Vodafone Idea-AGR case for 19 September, then postponed it to 26 September, but the government requested additional time. Subsequently, the case was rescheduled to 6 October and then to 13 October.

During the 19 September hearing, Solicitor General Tushar Mehta emphasised the need for a balanced approach, citing the government's substantial equity stake in Vodafone Idea and the importance of protecting consumer interests.

In its amended petition on 18 September, Vodafone Idea argued that the Supreme Court had only in 2020 “directed inclusion of the disputed heads for the computation of AGR. Hence, till date, it cannot be said that there was any default in payment requiring imposition of penalty”.

The telecom company later submitted an amended petition to the Supreme Court, requesting a waiver of penalties and interest on AGR dues, citing that the disputed components of the dues are still unresolved.

Vodafone AGR dues

Vodafone Idea currently owes approximately ₹83,400 crore in AGR dues to the government, with annual payments of ₹18,000 crore beginning in March. After including penalties and interest, its total liabilities are estimated to be nearly ₹2 trillion.