Tata Steel ordered to pay ₹890.52 Cr tax, penalty, and interest
Tata Steel Limited received an order to pay ₹890.52 crore in tax, ₹890.52 crore in penalty, and applicable interest regarding alleged irregular Input Tax Credit (ITC) for FY19-FY21. The company believes it has strong grounds to contest the order and anticipates no financial or operational impact.
While the company believes there will be no financial or operational impact, the order involves a substantial sum and potential litigation, warranting a medium impact assessment.
The company has been directed to pay a significant amount in tax, penalty, and interest, which is a negative development.
Tata Steel Limited has received an order from the Joint Commissioner of CGST & Central Excise, Jamshedpur, Jharkhand, directing the company to pay a tax amount of ₹890,52,10,202, a penalty of ₹890,52,10,202, and applicable interest. This order pertains to the alleged irregular availment of Input Tax Credit (ITC) for the period FY2018-19 through FY2020-21.
The company had previously disclosed receiving a Demand cum Show Cause Notice (SCN) concerning this matter. The SCN alleged contravention of GST provisions related to ITC.
Tata Steel believes that the submissions made by the company were not properly considered during the adjudication process. The core issue revolves around the excess ITC identified by comparing monthly returns with the ITC reflected on the GST portal. The company contends that there is no actual excess ITC and the difference arises from crediting ITC in a subsequent financial year, which is permissible under GST laws.
Consequently, Tata Steel intends to contest the order before the appropriate forum within the statutory timelines. The company is confident in its strong grounds on merit to challenge the demand. Based on the merits of the case and the available grounds for contestation, Tata Steel believes there will be no financial, operational, or other impact on its activities arising from this order.
What to do with a filing like this
Tata Steel Limited filed this with the NSE as a statutory disclosure, categorised under litigation updates. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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