Tata Steel Faces ₹1,007 Crore GST Demand Notice Over Input Tax Credit

Tata Steel Limited has disclosed the receipt of a Show Cause cum Demand Notice (SCN) amounting to over ₹1,000 crore, from the Office of the Commissioner (Audit), Central Tax, Ranchi. The SCN, dated June 27, 2025, and received on June 28, 2025, pertains to alleged irregularities in the availing of Input Tax Credit (ITC) during the financial years 2018-19 to 2022-23. Tata Steel has affirmed that the claims made in the SCN are without merit and that it intends to respond within the stipulated timelines.

Background and Scope of the SCN

The notice has been issued under Section 74(1) of the Central and State Goods and Services Tax Acts (CGST/SGST), read with Section 20 of the Integrated Goods and Services Tax Act (IGST), 2017. The total GST amount demanded is ₹1,007,54,83,342 for a five-year period, with additional demands for interest and penalties under relevant sections of the GST law.

The Company is required to present its case before the Additional/Joint Commissioner of Central GST & Central Excise, Jamshedpur, within 30 days of the SCN’s receipt. The demands include justification as to why:

1. GST of ₹1,007.55 crore should not be recovered under Section 74(1) of the CGST/SGST Acts.
2. Interest on the said amount should not be demanded under Section 50 of the GST/SGST Act.
3. Penalty should not be imposed under Section 74 of the CGST/SGST Act.

Company’s Response and Financial Implications

According to the disclosure, Tata Steel has already paid ₹514,19,36,211 towards GST in the normal course of business. This amount is proposed to be adjusted against the demand, thereby reducing the net alleged exposure to ₹493,35,47,131.

The Company firmly maintains that the SCN lacks merit and has confirmed its intent to make appropriate submissions to the adjudicating authority. Tata Steel has also clarified that the notice will have no impact on its financial, operational, or other business activities. The disclosure was made under the regulatory obligations of SEBI’s Listing Obligations and Disclosure Requirements Regulations, 2015.

Read More: Fact Check: EPFO Fake Form Alert – No New Submission Required, Pension Will Not Be Suspended!

Tata Steel Share Price Performance 

As of 30 June 2025, 11:12 AM, Tata Steel shares are trading at ₹160.82 per share, a decline of 0.39%. Over the past month, the stock has surged by 1.21%. 

Conclusion

Tata Steel’s receipt of a substantial GST demand notice adds a layer of regulatory scrutiny over its tax practices during the FY2018-2023 period. However, the company is confident of its legal standing and plans to challenge the demand through proper channels.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.