Tata Steel Wins Tax Litigation, Tax Exposure Reduced by ~₹215 Crore
Tata Steel received a favourable order from the Income Tax Appellate Tribunal, allowing deduction for interest expenditure related to Corus acquisition. The tax exposure is reduced from ~₹1,901 crore to ~₹1,686 crore. This order is expected to impact similar pending litigation for FY2009-FY2015.
The litigation involved a substantial amount of approximately ₹1,901 crore, and the favourable outcome reduces this exposure by around ₹215 crore, impacting the company's financial disclosures and potential liabilities.
The company received a favourable order in a significant tax litigation, leading to a reduction in its tax exposure.
Tata Steel Limited has received a favourable order from the Income Tax Appellate Tribunal regarding a tax litigation concerning the disallowance of interest expenditure deduction. The issue pertains to loans borrowed and utilized for the acquisition of Corus Group Plc.
Initially, the Deputy Commissioner of Income Tax had disallowed a claim of ₹518.76 crore for FY2008. Similar disallowances were made for subsequent years from FY2009 to FY2015, leading to an aggregate tax exposure of approximately ₹1,901 crore for the entire period.
The company had filed an appeal before the Income Tax Appellate Tribunal on May 10, 2016, for the FY2008 period. Following a final hearing in November 2025, the Tribunal issued a favourable order on February 20, 2026, allowing the claim for deduction of interest expenditure. This order will reduce the total tax exposure from approximately ₹1,901 crore to around ₹1,686 crore, a reduction of about ₹215 crore.
The Assessing Officer will implement this order through a separate order, and the company will reflect the necessary adjustments in its contingent liability disclosures for FY2027. Tata Steel believes this favourable outcome will positively influence related pending litigation for the FY2009 to FY2015 periods.
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