Tata Steel Limited has received a formal Demand cum Show‑Cause Notice from the Office of the Commissioner of CGST & Central Excise, Jamshedpur, alleging irregular claims of Input Tax Credit (ITC) amounting to ₹890.52 crore. The notice, dated June 13 and delivered on June 24, demands the company explain why the disputed amount, along with applicable interest and penalties, should not be recovered. This pertains to ITC claimed during the fiscal years 2018–19 through 2020–21 under provisions of the CGST and IGST Acts.
Details of Alleged ITC Irregularities
The notice cites potential violations of:
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Section 16: Conditions governing entitlement to claim input tax credit
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Section 41: Reversal rules in cases of non-payment to suppliers
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Relevant Integrated GST provisions regarding interstate credit claims
Tata Steel has been asked to present its defense to the Additional or Joint Commissioner of CGST & Central Excise in Jamshedpur within 30 days from receipt of the notice.
Company Responds Confidently
In a stock exchange filing, Tata Steel stated that the show‑cause notice is “without merit”, and that the company intends to submit its case within the stipulated timeframe. It also clarified that the notice is not expected to impact its financial results, operations, or overall business activities.
Market Reaction and Share Performance
Following the disclosure, Tata Steel’s stock saw a modest uptick of around 1%, closing at approximately ₹156–₹157. The market largely interpreted the notice as procedural and unlikely to lead to a substantial financial hit.
Implications and Next Steps
While the show‑cause notice marks a significant scrutiny effort by GST authorities, it is not uncommon for large corporations to face such queries in routine audits. Key developments to watch include:
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Company’s written response to tax authorities within the stipulated 30-day window
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Administrative hearings and possible demand order based on GST compliance evidence
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Broader implications for the steel and manufacturing sector, where large ITC claims are common
The ₹890 crore show‑cause notice issued to Tata Steel highlights the tightening of indirect tax compliance, particularly around input tax credits. Though the company has downplayed its potential impact, the matter will serve as a test of both GST enforcement mechanisms and corporate audit processes. For now, Tata Steel maintains that its claims were legitimate and within the scope of the law.
