VIVedanta Iron And Steel544784Tax or GST

Subsidiary gets GST demand-cum-show cause notice for ₹ 7,77,094/- over reverse charge on DMF, NMET

Subsidiary ESL Steel Ltd got a GST demand-cum-show cause notice for ₹ 7,77,094/- (CGST ₹ 3,88,547/-, SGST ₹ 3,88,547/-) over alleged short payment under reverse charge on DMF and NMET contributions for FY 2022-23.

By ScoutQuest · Thu 15 Oct 2026, 1:47 PM IST · 2 min read

GST Demand Amount

₹ 7,77,094/-

CGST Component

₹ 3,88,547/-

SGST Component

₹ 3,88,547/-

What was disclosed

ESL Steel Limited, a subsidiary of Vedanta Iron And Steel Limited, became aware around 3:00 PM of a Demand-cum-Show Cause Notice issued by the Office of the Superintendent, Central Tax, GST & Central Excise, Lathikata Range, Rourkela, upon accessing it on the GST portal on October 14, 2026.

• The Department has proposed recovery of GST amounting to ₹ 7,77,094/-.
• This is split equally into CGST ₹ 3,88,547/- and SGST ₹ 3,88,547/-.
• The alleged short payment is under Reverse Charge Mechanism (RCM) on District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) contributions for FY 2022-23.
• Applicable interest and penalty are in addition to this amount.

Reading the numbers

Under RCM, the recipient of a supply pays the GST instead of the supplier. The Department's case, as described in the update, is that GST under RCM on DMF and NMET contributions for FY 2022-23 was short paid. The figures involved are:

• Proposed GST recovery: ₹ 7,77,094/-
• CGST portion: ₹ 3,88,547/-
• SGST portion: ₹ 3,88,547/-

Interest and penalty, as applicable, would come on top of this amount.

What the company says

ESL is examining the notice and shall take appropriate steps in accordance with applicable laws within the prescribed timelines, and it is evaluating appropriate legal remedies.

The Company does not envisage any significant financial and operational impact on the Company, and it envisages no material impact on the financial, operations and/or other activities due to the said intimation. The notice requires ESL to submit its response within the prescribed timeline.

Points to keep in mind

• This is a notice-stage development. The Department has *proposed* recovery, and the notice calls for a response from ESL; it is not an order of recovery.
• The response is to be shared within the timeline prescribed in the notice.
• Any further order, appeal or payment would be the next steps to track.

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