Urban Company Gets Relief as GST Department Withdraws ₹8.70 Crore Demand

Urban Company Limited has informed stock exchanges that the Commercial Tax Officer, Guindy South-II, Chennai South, Tamil Nadu, has dropped GST proceedings initiated against the company under Section 73 of the SGST Act, 2017.  

The order, dated May 28, 2026, brings the matter to a close without any tax demand, interest liability or penalty on the company. 

Proposed Demand of ₹8.70 Crore Withdrawn 

The proceedings stemmed from a show cause notice (SCN) issued on May 4, 2026. The notice sought explanations regarding alleged discrepancies in GST returns for FY23 and had proposed a potential demand of ₹8.70 crore (₹8,70,03,806), including interest and penalty.  

The issues under review related to turnover reported in GSTR-1 and GSTR-3B, along with input tax credit (ITC) claimed during the period from April 2022 to March 2023. 

Findings of the Tax Authority 

Following the company's response, the GST department examined the records and concluded that there was no short reporting of outward tax liability in Form GSTR-3B.  

The order also noted that there was no difference between turnover reported in GSTR-1 and GSTR-3B.  

In addition, the ITC claimed by the company was found to be eligible, with no instances of irregular or ineligible credit identified during the review. 

No Demand, Interest or Penalty 

Based on these findings, the tax authority dropped the SCN in its entirety. The order specifically stated that no tax demand, interest, or penalty would be imposed on Urban Company. The company received the communication from the department on May 28, 2026. 

Impact on the Company 

In its disclosure, Urban Company stated that no further action is required in relation to the matter. The company also said the order will have no financial, operational, or other impact on its business activities. 

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Urban Company Share Price Performance  

As of May 29, 2026, 1:12 pm, Urban Company Ltd share price was trading at ₹121.16, down 1.78% from the previous closing price. 

Conclusion 

The closure of the proceedings removes the proposed GST demand of ₹8.70 crore relating to FY23 returns, with the tax department concluding that the company's GST filings and input tax credit claims were in order. 

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