Tata Steel has been served a show-cause-cum-demand notice by tax authorities regarding the alleged irregular availing of ₹1,007 crore in Input Tax Credit (ITC) between fiscal years 2018–19 and 2022–23
🔍 What the Notice Says
- Source of notice: The Office of the Commissioner (Audit), Central Tax, based in Ranchi, issued the notice on June 27, which was officially received by Tata Steel on June 28
- Legal grounds: The notice alleges violations under Section 74(1) of the CGST Act, and Section 20 of the IGST Act, for irregular ITC claims
💸 Company’s Response
- Partial payment made: Tata Steel has already paid ₹514.19 crore in GST during the notice period. After adjusting this, the remaining disputed liability stands at approximately ₹493.35 crore
- Compliance stance: The company maintains that the “claim lacks merit” and has pledged to submit its defense before the adjudicating authority within the 30‑day deadline
- Operational impact: Tata Steel stated that it does not expect any material effect on its business operations or financial performance
📌 Implications & Next Steps
- Legal & procedural phase: Tata Steel must present its case to the Additional or Joint Commissioner of Central GST & Central Excise in Jamshedpur within 30 days
- Financial risk: If authorities rule against the company, it could face additional penalties and interest, on top of the ₹493 crore still in dispute.
- Sector context: Similar notices have been issued by authorities lately—e.g., Tata Steel received a separate ₹890 crore-plus GST notice earlier this month related to a subsidiary livemint
🧭 What Investors Should Watch
- Regulatory scrutiny: Watch for further tax demands or penalties, including any precedent set by the GST tribunal’s decisions.
- Financial disclosures: Review upcoming quarterly reports to spot any provisions or contingencies related to this notice.
- Market sentiment: Stock reactions could fluctuate based on perception of regulatory risk, even though the company deems the impact immaterial.
✅ Bottom Line
While Tata Steel faces a sizeable ₹1,007 crore GST demand notice, the company remains confident in its stance, having already deposited about half the amount and expecting no major operational disruption. The situation now hinges on administrative hearings and potential tribunal outcomes.
