Wholly Owned Subsidiary Receives GST Show Cause Notices of Rs.10.07 Crores

Rane Steering Systems Private Limited, a wholly owned subsidiary, received Show Cause Notice(s) under Section 73 of the CGST Act, 2017 from the Assistant Commissioner (ST), Royapettah, South – I, Chennai on September 24, 2026.

Fri 25 Sep 2026

Financial Implication

Rs.10.07 Crores

Penalty Component

Rs.0.92 Crores

Notice Date

September 24, 2026

Periods Covered

FY 2022-23 & 2023-24

Issue

Claim of ineligible ITC under Section 17(5) of GST Act, 2017

What happened

Rane Steering Systems Private Limited (RSSL), a wholly owned subsidiary of the company, received Show Cause Notice(s) under Section 73 of the CGST Act, 2017 on September 24, 2026 from the Assistant Commissioner (ST), Royapettah, South – I, Chennai.

The issue

• The notices relate to claim of ineligible ITC (input tax credit) under Section 17(5) of GST Act, 2017.
• Periods covered: Financial Year 2022-23 & 2023-24.

Amounts involved

• Expected financial implication: Rs.10.07 Crores, including penalty.
• Penalty component: Rs.0.92 Crores.

In simple terms

Input tax credit lets a business offset GST paid on purchases against GST collected on sales. Section 17(5) lists items on which such credit cannot be claimed. The tax officer believes credit was taken on such blocked items and has asked the subsidiary to explain before any demand is confirmed.

What the company will do

RSSL, in consultation with its consultants / tax advisors, will file a suitable reply before the appropriate authority within the prescribed timelines.

For investors

A show cause notice is a first step, not a final demand; the stated amount is the maximum currently indicated and may change after the reply and adjudication. The exposure sits at the wholly owned subsidiary level, so any final outcome would flow into the group's consolidated accounts.

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