Background and Previous Disclosure

This disclosure references the company's earlier disclosures dated February 25, 2025, regarding an adjudication order dated February 24, 2025 passed by the Assistant Commissioner of Commercial Taxes (Audit), DGSTO-04, Bengaluru, for the tax period April 2020 to March 2021. The order confirmed demand of erroneously availed Input Tax Credit under IGST, CGST and KGST along with applicable interest.

Current Development

Details of the Order

Authority: Office of the Joint Commissioner of Commercial Taxes (Appeals)-4, Bengaluru, Commercial Tax Department, Government of Karnataka

Nature of Order: Order dated July 28, 2026 passed under Section 107(11) of the Karnataka GST Act, 2017 read with the Central GST Act, 2017, dismissing the company's appeal and confirming/upholding the demand raised vide the original adjudication order dated February 24, 2025.

Tax Period: April 2020 to March 2021 (FY 2020-21)

Date of Receipt: Order dated July 28, 2026 received on July 30, 2026

Details of Violations/Allegations

The alleged violations relate to excess/ineligible availment of Input Tax Credit under Section 16 of the CGST/KGST Act, 2017 for the period April 2020 to March 2021, on account of:

  • Non-disclosure of ITC pertaining to FY 2019-20 in the statutory reconciliation tables of annual returns GSTR-9/GSTR-9C
  • ITC attributable to supplier credit notes and non-compliance with Section 16(2)(c) of the CGST/KGST Act
  • Certain invoices not appearing in GSTR-2A

The appellate authority held that the company failed to substantiate its ITC claims with complete and cogent documentary evidence, after giving credit for the amount already admitted and discharged by the company.

Financial Impact Quantified

The order confirms a total demand of ₹22,42,28,783/- comprising:

  • Tax: ₹10,01,02,136/-
  • Interest: ₹11,41,16,435/- (up to the date of the order)
  • Penalty: ₹1,00,10,212/-

Against this total demand, the following amounts already stand deposited by the company:

  • Pre-deposit: ₹1,00,10,214/-
  • Admitted tax and penalty: ₹1,35,550/-

Company's Response and Next Steps

The company has taken the order on record and is evaluating filing of a further appeal before the GST Appellate Tribunal (GSTAT), as and when constituted, within the time prescribed under relevant provisions of the CGST/KGST Act, 2017.