The order relates to the availment and utilization of Input Tax Credit (ITC) accrued on Initial Public Offer (IPO) expenses for the period 2021-22 to 2024-25.
Order Details:
- Issuing Authority: Office of the Principal Commissioner of Central Tax, Visakhapatnam, Central GST Commissionerate
- Date of Receipt: June 22, 2026
- Nature of Order: Confirmation of tax demands and equivalent penalties
Specific Demands and Penalties:
1. For FY 2021-22 to 2023-24 (under Section 74(1) of CGST Act, 2017 read with concurrent provisions of APGST Act, 2017 and Section 20 of IGST Act, 2017):
- Tax Demand: ₹2,84,97,628/-
- IGST: ₹2,20,50,300/-
- CGST: ₹32,23,664/-
- SGST: ₹32,23,664/-
- Equivalent Penalty: ₹2,84,97,628/-
2. For FY 2024-25 (under Section 74A of CGST Act, 2017 read with concurrent provisions of APGST Act, 2017 and Section 20 of IGST Act, 2017):
- Tax Demand: ₹7,12,832/-
- IGST: ₹7,10,694/-
- CGST: ₹1,069/-
- SGST: ₹1,069/-
- Equivalent Penalty: ₹7,12,832/-
Alleged Violation:
The order alleges irregular availment and utilization of Input Tax Credit (ITC) amounting to ₹2,92,10,460/- accrued on Initial Public Offer (IPO) expenses for the period from December 2021 to March 2025. The authority contends that the company incorrectly treated this as an exempt supply transaction in securities under Section 17(3) of the CGST Act, 2017.
Financial Impact:
The total monetary impact confirmed in the order is ₹5,84,20,920/-, comprising:
- Cumulative tax demand: ₹2,92,10,460/-
- Cumulative penalty: ₹2,92,10,460/-
- Plus applicable interest (amount not quantified in disclosure)
Company Response:
The company is evaluating the order and intends to file an appeal before the ADC Appeals, Central Tax, Guntur within the prescribed statutory timelines. The disclosure states there is no impact on the operational activities of the company.