GST demand order of Rs. 1,18,38,402 received for FY 2020-21; company disputes it and plans appeal

Afcons received a GST demand order for FY 2020-21 aggregating Rs. 1,18,38,402 — tax Rs. 59,19,201 and penalty Rs. 59,19,201, interest yet to be quantified — over excess Input Tax Credit availed and utilized.

Fri 9 Oct 2026

Aggregate GST Demand

Rs. 1,18,38,402

Tax Component

Rs. 59,19,201

Penalty Component

Rs. 59,19,201

What was disclosed

Afcons Infrastructure has informed the exchanges about a demand order received from the office of the Assistant Commissioner, CGST, Division-VII, Ahmedabad North GST Authority. The order was received on October 8, 2026 and confirms a demand for tax, interest and penalty under section 74(1) of the CGST Act, 2017.

The matter relates to a Show Cause Notice for Financial Year 2020-21, concerning Input Tax Credit excess availed and utilized.

The amounts involved

• Aggregate demand proposed: Rs. 1,18,38,402/-
• Tax: Rs. 59,19,201/-
• Penalty: Rs. 59,19,201/-
• Interest under section 50(3) is yet to be quantified, so it is not part of the aggregate figure above.

Of the aggregate demand, tax and penalty are equal in size, at Rs. 59,19,201/- each, with interest to be added separately.

Understanding the terms

• Input Tax Credit (ITC) is the credit a business takes for GST already paid on its purchases, which it then sets off against the GST it owes on its sales.
• An allegation of "excess ITC availed and utilized" means the authority believes the company claimed and used more credit than it was entitled to.
• Section 74(1) of the CGST Act, 2017 is the provision under which such demands for tax alleged to have been short paid, not paid, or wrongly taken are confirmed, along with penalty.
• Such an order normally follows a show cause notice issued to the company, giving it an opportunity to respond.

The company's stated position

• "The Company disputes and contests the said order in its entirety."
• It "intends to file an appeal before the appropriate appellate authority in accordance with the applicable provision of law."
• On impact, the company states: "There is no financial impact on the Company arising from this matter."

How to read this

• This is a tax demand for an earlier financial year (FY 2020-21), not a fresh operational or business development.
• The company has neither accepted the demand nor provided for it as a financial impact in its own words; it has chosen to contest the order through the appellate route.
• The quantified portion in the update is Rs. 1,18,38,402/-; the interest component is yet to be quantified by the authority.
• The next development to follow would be the appeal and any order passed by the appellate authority.

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