GST order received: ₹ 0.90 Crore ITC demand confirmed, penalty of ₹ 0.90 Crore under three provisions

Mangalam Cement received a GST order from the Deputy Commissioner, Central GST Division, Kota Rural, confirming ₹ 0.90 Crore ITC demand (IGST) and penalties of ₹ 0.90 Crore each under three sections.

Thu 8 Oct 2026

ITC demand (IGST)

₹ 0.90 Crore

Penalty per section (three sections)

₹ 0.90 Crore each

Financial impact if sustained

₹ 2.70 Crore

An order from a GST authority has been received by the company, and the company has disclosed it to the stock exchanges.

For a novice: Input Tax Credit is the tax a business has already paid on its purchases, which it can set off against the tax it collects on its sales. An allegation of wrong availment of ITC means the authority believes credit was taken where it should not have been.

What the Order says

• It has been passed by the Deputy Commissioner, Central GST Division, Kota Rural.
• The Order is dated 7th October, 2026, and was received by the Company Secretary & Compliance Officer on 8th October, 2026.
• The Order alleges that the company wrongly availed ITC of ₹ 0.90 Crore on the basis of an invoice issued by a service provider, in contravention of Section 16 of the CGST Act, 2017.
• It confirms a demand of ₹ 0.90 Crore (IGST) under Section 74(9) of the CGST Act, 2017, along with applicable interest under Section 50.
• A penalty of ₹ 0.90 Crore under Section 74, ₹ 0.90 Crore under Section 122(1)(x) and ₹ 0.90 Crore under Section 122(1)(xvii) of the CGST Act, 2017 has been imposed on the company.

What the company has stated

• If the Order is sustained, the financial impact would be to the extent of ₹ 2.70 Crore.
• There is no impact on the operations or business activities of the company.
• The company is examining the Order and the available legal remedies, and intends to file an appeal under Section 107 of the CGST Act, 2017 within three months from the date of receipt of the Order.

What to keep in mind

• The demand and the penalties are as set out in the Order received, and the company has stated its intention to appeal against it.
• The company has itself put the financial impact, if the Order is sustained, at ₹ 2.70 Crore, and has stated that there is no impact on operations or business.

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