Bharti Airtel shares in focus after SC verdict on Rs 585 cr entertainment tax case

Bharti Airtel shares are expected to be in the spotlight on Monday after the Supreme Court dismissed appeals filed by its subsidiary Bharti Telemedia in a Rs 585 crore litigation related to entertainment tax on Direct-to-Home (DTH) services.

The apex court, in its May 22 judgment, upheld the authority of State Governments to levy entertainment tax on DTH services, dismissing Bharti Telemedia’s challenge to previous High Court rulings.

The total exposure from the verdict stands at approximately Rs 585 crore, of which the company has already paid Rs 575 crore, and the full amount had been provisioned for in the books.


Bharti Telemedia is currently reviewing the judgment to determine the next steps, if any. The judgment was uploaded to the Supreme Court's website on May 22.

While the financial impact is largely accounted for, the ruling may carry broader implications for the regulatory treatment of telecom and media services going forward.

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The legal battle, which has spanned several years, revolved around whether state governments had the authority to impose an Entertainment Tax on Direct-to-Home (DTH) services. Telecom operators like Airtel contended that such services fall under the central government’s jurisdiction, as they are classified as telecommunications and broadcasting services.

The Supreme Court’s dismissal of the appeal effectively confirms that DTH services fall under the taxable jurisdiction of state governments, a ruling that could have broader implications for the industry.

However, as most telecom operators have already moved to the GST regime, where Entertainment Tax was merged in 2017, the verdict mainly pertains to older, pre-GST liabilities.

Shares of Bharti Airtel closed flat at Rs 1,832.10 on the BSE on Friday.

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