SSSaraswati Saree Depot544230Tax or GST

GST order imposes ~₹32.09 lakh penalty; company says it will contest in appeal

GST order (Form DRC-07) from CGST Kolhapur imposes an aggregate penalty of ~₹32.09 lakh on the company.

By ScoutQuest · Mon 19 Oct 2026, 8:42 PM IST · 1 min read

Aggregate GST Penalty Imposed

~₹32.09 lakh

Penalty Under Section 73(9)

₹1,85,391/-

Penalty Under Section 74A(5)(i)

~₹30.24 lakh

What the company disclosed

• Saraswati Saree Depot received an order in Form GST DRC-07 from the Joint Commissioner, CGST Kolhapur Commissionerate, Maharashtra.
• The order is Order-in-Original No. 01/GST-DRC-07/JC/AP/KOP/26-27 dated October 12, 2026, passed under Section 73(9) and Section 74A(6) of the CGST Act, 2017 read with the corresponding provisions of the MGST Act, 2017.
• The company received the order on October 19, 2026.

The money involved

• Aggregate penalty imposed: ~₹32.09 lakh.
• Of this, ₹1,85,391/- was imposed under Section 73(9) and ~₹30.24 lakh under Section 74A(5)(i).

What the dispute is about

• The order follows a Show Cause Notice dated December 12, 2025 issued by the DGGI, Pune Zonal Unit.
• The allegation is that the company availed input tax credit on IPO-related expenses, which the authorities held to be inadmissible under Sections 17(2) and 17(3) of the CGST Act, 2017.
• The company had shared a detailed written reply dated January 16, 2026 contesting the proposed demand before the Adjudicating Authority.

The company's stated position

• It does not accept the DRC-07 order and will contest it legally.
• It believes it has reasonable merit on its side to win in a higher appellate forum.
• The tax demand with interest and penalties is not expected to have any financial or operational adverse impact on the company.
• It says it has sufficient input credit available to service this demand.

What to watch

• The next step indicated by the company is a challenge before a higher appellate forum. How that proceeds is the main development to track on this matter.

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