Now Reading: Supreme Court quashes Rs 1,781 crore GST demand on Tata Steel
-
01
Supreme Court quashes Rs 1,781 crore GST demand on Tata Steel
The Supreme Court has quashed a tax demand of Rs 890.52 crore, an equivalent penalty and applicable interest against Tata Steel in a long-running GST dispute. The ruling sets aside the existing…
The Supreme Court has quashed a tax demand of Rs 890.52 crore, an equivalent penalty and applicable interest against Tata Steel in a long-running GST dispute. The ruling sets aside the existing liability, although the Tax Department has been given limited scope to begin fresh proceedings under the Central Goods and Services Tax Act.
In a regulatory filing on Wednesday, Tata Steel said the apex court allowed its appeal and overturned both a June 2025 show-cause notice and a December 2025 order issued by CGST and Central Excise authorities in Jamshedpur. The tax demand and penalty together were worth about Rs 1,781 crore, excluding interest.
The dispute originated with a show-cause notice alleging that Tata Steel had irregularly claimed Rs 890.52 crore in input tax credit between financial years 2018-19 and 2020-21. The Supreme Court has allowed the Tax Department to initiate appropriate proceedings under Section 74 of the CGST Act, if it considers such action necessary and complies with the conditions set out in the judgment. Any fresh order must be passed by February 28, 2027.
Indian Opinion Analysis
Input tax credit disputes are among the most litigated issues under GST, as the rules on transitional credits and time limits for claims have changed multiple times since the tax was introduced in 2017. Tata Steel had argued the credit related to one financial year but was claimed in a subsequent year, a practice the courts have often scrutinised for compliance with Section 16 of the CGST Act. The Supreme Court's decision to quash the demand while explicitly preserving the department's power to re-adjudicate under Section 74 gives both sides a second chance to argue on the merits. The February 2027 deadline for a fresh order sets a clear timeline for the department to act or let the matter close.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
