HEG Ltd Receives ₹2.82 Billion Tax Recovery and Penalty Notice—Show Cause Dropped by GST Authority

HEG Limited, a leading graphite electrode manufacturer, recently received a show cause notice from the Office of the Deputy Commissioner of State Tax, Mandideep, Bhopal Division, for the tax period July 2017 to March 2018. The notice proposed the recovery of IGST refunds along with a penalty totaling ₹2,823.4 million under Section 74 of the MPGST Act 2017 and CGST Act 2017.

 

Key Highlights:

 

Tax Dispute Origins: The notice alleged that HEG had erroneously claimed IGST refunds during the specified period, prompting authorities to seek recovery of the refunded amount plus a substantial penalty.

 

Swift Resolution: In a significant development, the GST authority dropped the proceedings against HEG Ltd on February 4, 2025. The decision was based on a review of the information available on record, effectively nullifying the demand for recovery and penalty.

 

Regulatory Process: The show cause notice and subsequent order were part of standard regulatory procedures under GST law, where companies are periodically audited for compliance with tax provisions.

 

Financial Impact: With the proceedings dropped, there is no adverse financial impact on HEG’s operations or profitability from this notice. The company continues to maintain a strong financial position and compliance track record.

 

Transparency: HEG Ltd promptly disclosed the notice and its resolution to the stock exchanges, underscoring its commitment to regulatory transparency and good corporate governance.

 

Sources: MarketScreener, HEG Ltd Official Disclosure, NSE Announcements