Vodafone Idea Slammed with GST Order Imposing ₹40.09 Lakh Penalty over Cancelled‑Supplier ITC
The company has stated that it does not agree with the findings and will pursue appropriate remedies for rectification or reversal. The disclosure was made in compliance with Regulation 30 of the SEBI Listing Regulations.
Vodafone Idea Limited (Vi) has informed the stock exchanges that it has received an order under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017, confirming a penalty of ₹40,09,461 along with applicable tax demand and interest.
The order was issued by the Joint Commissioner, State Tax, Circle‑C, Jaipur II, Rajasthan, and was received by the company on December 15, 2025.
The action stems from allegations that the telecom operator availed Input Tax Credit (ITC) from suppliers whose GST registrations had been cancelled ab‑initio during FY 2018–19, rendering the credits ineligible under the GST law.
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According to the company’s regulatory filing, the tax authority has concluded that the ITC claimed from these cancelled suppliers constitutes a contravention under Section 74, which deals with tax short‑payment or wrongful ITC utilisation due to fraud, wilful misstatement, or suppression of facts.
Orders under this section typically carry stringent consequences, including interest and a penalty equal to the tax amount determined. In this case, the authority has confirmed the penalty component at ₹40.09 lakh, with the total financial exposure extending to the tax demand and interest as well.
Vodafone Idea, however, has categorically stated that it does not agree with the conclusions drawn in the order. The company has indicated that it will take appropriate steps for rectification or reversal, signalling its intent to challenge the findings through statutory remedies such as appeal or rectification petitions.
The company’s disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates listed entities to report material orders, penalties, and regulatory actions that may impact financials or operations.
As per the SEBI Master Circular, Vodafone Idea also furnished detailed particulars in the prescribed format, including the nature of the order, the authority involved, the alleged violation, and the potential financial impact.
The allegation centres on ITC claims from suppliers whose GST registrations were cancelled ab‑initio, meaning the cancellation was applied retrospectively from the date of registration. Such retrospective cancellations have been a contentious issue across industries, as taxpayers often have no visibility into the compliance status of vendors at the time of transactions.
For Vodafone Idea, the maximum financial impact is limited to the tax demand, interest, and penalty levied, as disclosed in the filing. The company has clarified that the order does not have any immediate operational implications and that it remains committed to pursuing all available legal remedies to contest the findings.
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