TSTeamLease Services539658Tax or GST

TeamLease: Receipt of GST Show Cause Notice for FY 2022-23; proposed tax, interest, penalty total INR 52.76 crore

TeamLease has received a Show Cause Notice from the Deputy Commissioner of Commercial Taxes (Large Taxpayers Unit)-03, Bengaluru under Section 73(1) of the KGST Act and CGST Act for April 2022 to March 2023 (FY 2022-23).

By ScoutQuest · Tue 13 Oct 2026, 8:15 PM IST · 2 min read

Proposed Tax

INR 28.92 crore

Proposed Interest and Penalty

interest of INR 20.95 crore and penalty of INR 2.89 crore

Stated Quantum Implication

INR 52.76 crore

What the Company disclosed

TeamLease has received a Show Cause Notice dated September 29, 2026 from the Deputy Commissioner of Commercial Taxes (Large Taxpayers Unit)-03, Bengaluru, Department of Commercial Taxes, Government of Karnataka, under Section 73(1) of the Karnataka Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017.

The notice relates to the period April 2022 to March 2023 (FY 2022-23).

Background

• The Company had earlier received an intimation in Form GST DRC-01A in this matter.
• The proper officer dropped a majority of the issues raised in it, based on the Company's submissions.
• The Show Cause Notice pertains to the remaining issues.

What the notice alleges

On turnover reporting

• It concerns adjustments in turnover for reasons not listed, reported under Table 5O of GSTR-9C, amounting to INR 42.48 crore.
• The notice proposes tax at 18% on the entire amount, on the ground that no reply was submitted by the Company in respect of this item.

On exempt supplies

• It alleges under-reporting of Exempted/Nil-rated/Non-GST outward supplies.
• The notice proposes tax at 18% on the difference between the value reported in GSTR-3B and in Table 7(b) of GSTR-9C, amounting to INR 81.87 crore.
• In addition, it proposes tax on the entire exempt supply in the absence of documentary evidence substantiating the exemption, computed at 18% each under CGST and SGST.

The Company's view

• In the Company's view, the tax on the exempt supplies has been computed at 18% each under CGST and SGST instead of that rate being split equally between the two, resulting in the tax demand being overstated by INR 3.27 crore.

The money involved

• Quantum implication as per the notice: INR 52.76 crore
• Tax: INR 28.92 crore
• Interest: INR 20.95 crore
• Penalty: INR 2.89 crore
• Interest has been computed by the Department up to the date of the notice and is subject to change.

What happens next

• The Company is evaluating the notice and will file its reply in Form GST DRC-06 on or before October 29, 2026.
• The Company has said it will keep the stock exchanges informed of any material developments in this matter.
• The intimation to the exchanges was submitted with a delay, which the Company attributes to an inadvertent gap in internal communication between its indirect tax and secretarial functions; it says it has since strengthened its internal reporting process.

How to read this

A show cause notice is a formal communication from the tax authority setting out its allegations and the tax it proposes to levy; it is not by itself a final demand.

The Company has stated that it will reply within the prescribed timeline. The figure to track is the stated quantum implication of INR 52.76 crore and how the matter moves once the reply is shared.

Nothing here is a view, opinion or recommendation of ScoutQuest, its parent, directors or employees. ScoutQuest is a technology company: this page was assembled automatically from public sources using artificial intelligence, and may contain errors or omissions. Confirm everything against the original source before you act on it. Any use of this page is at your own risk, and neither ScoutQuest nor its parent, directors or employees accepts liability for it.

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