Timken India522113Tax or GST

GST appeal rejected: Commissioner (Appeals) upholds ~Rs. 8.19 crore demand and equal penalty

Timken India has informed exchanges that the Office of the Commissioner (Appeals), CGST & Central Excise, has upheld an earlier order and rejected the company's appeal.

By ScoutQuest · Tue 3 Nov 2026, 6:54 PM IST · 2 min read

Additional GST Demanded: ~Rs. 8.19 crore, plus interest and penalty
GST Rate Dispute: 18% (SAC 9983) as per the department versus 12% (SAC 9973) as per the company
Disputed Period: 1 July 2017 to October 2021

An update on a GST dispute, not a business update

The company has disclosed the outcome of its appeal against a GST order relating to royalty payments made to its overseas group company. The appeal has not gone the company's way.

What the department alleges

Royalty paid towards fee for technical services should be classified under SAC 9983, where GST is 18% under Reverse Charge Mechanism.
The company had classified the same under SAC 9973, where GST is 12% under Reverse Charge Mechanism.
The disputed period is 1 July 2017 to October 2021.
Additional GST demanded: ~Rs. 8.19 crore, along with interest and penalty.

What has now happened

The original order dated 21 October 2024 was passed by the Office of Commissioner CGST and CEX, Jamshedpur, confirming the demand and imposing a penalty of ~Rs. 8.19 crore under the relevant GST provisions, along with confirmed recovery of interest. The company appealed, and the Office of the Commissioner (Appeals) has upheld the earlier order and rejected the appeal. The company received the order by email on 2 November 2026 at 12:00 noon.

What the company says

It is of the opinion that the order is not sustainable.
It is taking necessary steps to file an appeal before the appropriate authority to get relief.
It does not anticipate any immediate financial or monetary impact.

What the documents show about the next step

The order records that an appeal can be shared before the Appellate Tribunal within 03 months in FORM GST-APL-05, on payment of 20% of the duty demanded where duty, or duty and penalty, are in dispute, or the penalty where penalty alone is in dispute.

How to read this as an investor

This is a tax classification dispute about whether royalty should attract 18% or 12% under Reverse Charge Mechanism, not a demand about the company's main manufacturing operations.
The quantified amount in the disclosure is the additional GST of ~Rs. 8.19 crore; interest and penalty are additional to that, and the order also confirms a penalty of the same amount.
The company's stated position is that there is no immediate financial or monetary impact, and it intends to pursue the matter further.
The company's own framing is that the order is not sustainable, which indicates the matter is contested rather than concluded.

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