Tata Steel facing show cause notice over input tax credit
What's the story
Tata Steel has been issued a show cause-cum-demand notice by tax authorities for an alleged irregular availment of input tax credit worth ₹1,000 crore between FY19 and FY23. The notice was issued by the Office of the Commissioner (Audit), Central Tax, Ranchi on June 27. It alleges that the steel giant availed this input tax credit in violation of provisions under Section 74(1) of CGST/SGST Act, 2017.
Company stance
Notice states amount should be recovered from company
In its stock exchange filing, Tata Steel said it has been asked to show cause before the Additional/Joint Commissioner of Central GST & Central Excise, Jamshedpur within 30 days. The notice states that GST worth ₹1,007.54 crore for FY2018-19 through FY2022-23 must be demanded and recovered from the company. The steel giant claimed that it had already paid a GST of ₹514.19 crore in normal business operations.
Legal action
Tata Steel challenges notice
Tata Steel has challenged the notice, claiming it has no merits. The company plans to make its submissions before the appropriate forum within given timelines. It also clarified that there is no impact on its financial, operational or other activities arising from this notice. Under GST rules, businesses can avail credits in input tax on purchases for outputs, which they can claim as deductions in their tax liabilities.