India's Vodafone Idea gets $71 million tax penalty

Indian telecom operator Vodafone Idea said on Thursday it had received an order levying a penalty of 6.38 billion rupees (nearly $71 million), for alleged “short payment” of taxes.

The order, issued by a goods and services tax authority, comes a day after the Indian government granted the debt-saddled firm a partial moratorium on adjusted gross revenue (AGR) dues, disappointing investors who had hoped for a waiver.

Vodafone Idea, jointly owned by India’s Aditya Birla Group and Vodafone Group, said it does not agree with the penalty order and would take legal action against the same.

Shares of the country’s no. 3 telecom player closed 7.8% higher on Thursday after having dropped about 11% on Wednesday, when the government’s five-year moratorium was announced, freezing payments of $9.76 billion.

Analysts at Emkay said in a note on Friday that a moratorium would not be sufficient to solve Vodafone Idea’s liquidity issues.