GST Show Cause Notice for FY 2022-23 with Rs. 4.91 crore tax demand plus interest and penalty

The company received a Show Cause Notice under Section 73 of the CGST/Karnataka GST Act from the Deputy Commissioner of Commercial Taxes, Bengaluru, for FY 2022-23.

Mon 28 Sep 2026

Tax Demand

Rs. 4,91,06,051/-

Interest Demanded

Rs. 3,66,36,682/-

Penalty Demanded

Rs. 49,10,606/-

Reason for Notice

ITC Mismatch & HSN misclassification

Fiscal Year

FY 2022-23

What happened

Kirloskar Oil Engines has informed the exchanges that it received a Show Cause Notice under Section 73 of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017, dated 28th September 2026, from the Deputy Commissioner of Commercial Taxes, Bengaluru.

The amounts demanded

• Tax: Rs. 4,91,06,051/-
• Interest: Rs. 3,66,36,682/-
• Penalty: Rs. 49,10,606/-

Why

The alleged issues are ITC Mismatch & HSN misclassification for the FY 2022-23. ITC mismatch means input tax credit claimed did not tally with the records available with the tax department; HSN misclassification refers to goods being classified under a code the department disputes.

Company's position

The company states it does not foresee any material impact on its financial, operations or other activities, and is in the process of update a necessary reply before the appropriate authority within the prescribed timelines.

How to read this

A Show Cause Notice is the start of a tax proceeding, not a final liability. The outcome depends on the company's reply and any subsequent adjudication or appeal. Investors may want to watch for further updates on how the matter progresses.

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