The Indian telecom major Reliance Communications (RCom) has expressed its differences with the Andhra Pradesh government over the latter’s decision to impose Value Added Tax (VAT) on company’s recharge vouchers and Value Added Services (VAS). 

Challenging the decision, RCom has appealed to the Supreme Court to waive the VAT of $9 million (Rs 43 crore) imposed on the recharge vouchers and VAS.

The Andhra Pradesh government has issued a deadline to RCom directing it to deposit the one-third of the amount by the end of September. The Supreme Court will hear RCom’s case on September 29, just a day before the deadline.

The AP government imposed VAT of 12.6 per cent on Starter Kits and recharge coupons, while a VAT of four per cent was imposed on the VAS. These products were categorised as goods under the AP VAT Act.

RCom has come out with the argument that recharge vouchers are just a payment method for the service rendered, while VASs were purely services, and services cannot be considered as goods.

The Reliance officials said they are waiting for the Supreme Court decision on September 29. X