Rane (Madras) Ltd has received a tax penalty notice of ₹122.3 million from the Central Goods and Services Tax (CGST) authorities. The penalty arises from alleged irregularities in Input Tax Credit (ITC) claims and short payment of GST for FY 2021–22. The company intends to challenge the demand.
Rane (Madras) Ltd, a leading auto components manufacturer, disclosed that it has been served a tax penalty notice of ₹122.3 million by the CGST and Central Excise Department, Chennai North. The notice was issued under Section 73(1) of the CGST Act, 2017, citing discrepancies in tax compliance during FY 2021–22.
Key Highlights
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Penalty Amount: ₹122.3 million (excluding interest and additional charges).
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Reason: Alleged excess or incorrect Input Tax Credit (ITC) claims, non-reversal of ineligible credits, and short payment of GST.
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Period Covered: April 2021 – March 2022.
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Company’s Response: Rane (Madras) Ltd intends to file a formal reply and contest the penalty within the stipulated timelines.
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Financial Impact: The demand could affect near-term cash flows, though the company maintains confidence in its legal position.
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Industry Context: Tax disputes under GST remain common in the auto sector, where ITC claims are frequently scrutinized.
This development highlights the increasing vigilance of tax authorities on compliance lapses, particularly in manufacturing industries. Stakeholders will closely watch the company’s legal response and its potential financial implications.
Sources: FilingReader News Wire, CGST Chennai North Notice