GST Order Confirms Rs. 4.06 Crore ITC Demand With Equal Penalty; Appeal Planned

Company received a GST Order-in-Original on 28th Sept 2026 from the Additional Commissioner, CGST Mumbai East, covering audit of FY 2020-21 to FY 2022-23.

Tue 29 Sep 2026

Input Tax Credit Demand

Rs. 4,06,03,220/-

Penalty Amount

Rs. 4,06,03,220/-

Order Date

28th September 2026

Audit Period

FY 2020-21 to FY 2022-23

Issuing Authority

Additional Commissioner, CGST & Central Excise, Mumbai East

What was shared

The Company disclosed, under Regulation 30, that on 28th September 2026 it received an Order-in-Original from the Additional Commissioner, CGST & Central Excise, Mumbai East Commissionerate, arising out of GST audit proceedings for FY 2020-21 to FY 2022-23.

The amounts

• Input Tax Credit demand confirmed: Rs. 4,06,03,220/-, along with applicable interest.
• Penalty imposed: Rs. 4,06,03,220/-, an equivalent amount.

The demand is raised under the Central GST Act, 2017, the Maharashtra GST Act, 2017 and the Integrated GST Act, 2017.

What the dispute is about

The Order questions the eligibility of certain input tax credits claimed by the Company, covering:

• credits on invoices issued during the post-demerger business transition period;
• credits linked to the Company's Input Service Distributor (ISD) registration;
• certain overseas procurement support and operational expenses cross-charged by Piramal Enterprises Limited.

Input tax credit is the GST a company has already paid on its purchases, which it sets off against GST payable on its sales. When authorities hold such credit ineligible, the amount becomes payable, often with interest and penalty.

Company's position

The Company states it has carefully reviewed the Order and continues to strongly believe it has a meritorious case on both facts and law. It intends to challenge the Order by update an appeal before the appropriate appellate authority within the prescribed timelines.

Stated impact

The Company does not expect the Order to have any material impact on its financials, operations or other activities.

How to read this

Such orders are a routine part of tax litigation for large companies and are frequently contested at appellate levels. The sums involved here are specified and the Company has indicated it will appeal, so the final outcome will depend on the appellate process.

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