Tata Steel Responds to ₹891 Cr Tax Claim, Calls Notice Unwarranted

Tata Steel Ltd has received a show cause cum demand notice from Indian tax authorities seeking recovery of ₹891 crore in allegedly irregular Input Tax Credit (ITC) claims. The notice, issued by the Directorate General of GST Intelligence (DGGI), pertains to compensation cess credits claimed between FY19 and FY21, primarily linked to coal procurement by the now-amalgamated Tata Steel Long Products.

 

According to the filing, the tax department alleges that the company violated provisions under the Central GST Act and related rules by availing ineligible ITC. The notice also questions the reversal of ₹1,602 crore already made by the company in its GSTR-3B filings and proposes an equivalent penalty of ₹891 crore.

 

Tata Steel has 30 days to respond to the adjudicating authority in Jamshedpur. The company, however, maintains that the notice lacks merit and has stated that it will make appropriate submissions within the stipulated timeframe. It also clarified that the development will not impact its financial or operational activities.

 

This comes amid a broader tax reassessment case involving Tata Steel’s acquisition of Bhushan Steel, where the Income Tax Department has sought to reassess over ₹25,000 crore in taxable income. The company has challenged that order in the Bombay High Court.

 

Key Highlights:

 

₹891 crore tax demand for alleged ITC irregularities

Linked to Tata Steel Long Products’ coal purchases (FY19–FY24)

₹1,602 crore already reversed; penalty of ₹891 crore proposed

Company denies wrongdoing; no operational impact expected

 

Sources: Investing.com, Business Standard, FT Markets Disclosure