Wholly Owned Subsidiary Receives GST Show Cause Notice of Rs.57.12 Crores for Haryana Unit

Wholly owned subsidiary Rane Steering Systems received a GST Show Cause Notice from State Tax authorities, Rewari, Haryana, for FY 2022-23.

Mon 28 Sep 2026

GST Demand Amount

Rs.57.12 Crores

Penalty Component

Rs.1.25 Crores

Financial Year

FY 2022-23

Issuing Authority

Deputy Excise & Taxation Commissioner (State Tax), Rewari, Haryana

Notice Date

September 28, 2026

What was shared

Rane Holdings informed the exchanges that its wholly owned subsidiary, Rane Steering Systems Private Limited (RSSL), has received a Show Cause Notice under Section 73 of the CGST Act, 2017 from the Deputy Excise & Taxation Commissioner (State Tax), Rewari, Haryana. The notice was received on September 28, 2026.

What the notice is about

• Excess input tax credit (ITC) claimed in GSTR-3B compared to GSTR-2B
• Reverse charge liability on trademark fee and secondment of overseas employees, among others
• Miscellaneous issues such as availment of ineligible ITC and issuance of credit notes

The notice applies to Financial Year 2022-23.

Amounts involved

• Expected financial implication aggregating to Rs.57.12 Crores including applicable interest and penalty
• Penalty component of Rs.1.25 Crores

Company's response

RSSL, in consultation with its consultants and tax advisors, states it is confident of its position on the merits of the case and will contest before the appropriate authority within the prescribed timelines. It expects a positive resolution.

How to read this

A Show Cause Notice is a demand asking the taxpayer to explain why the stated tax, interest and penalty should not be levied. It is an initial stage, not a final order, and the amount may change depending on the outcome of the proceedings. Investors may view a demand of this size at a wholly owned subsidiary as a contingent risk until the matter is resolved.

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