Victory for KEI! ₹590 Million Tax Demand Vanishes in Dramatic Turn

KEI Industries Limited, a leading player in the cable and wire manufacturing sector, has secured a significant legal victory after a GST demand order totaling ₹590.4 million (₹59.03 crore) was quashed by the tax authorities. This decision comes as a major relief for the company, which had been facing multiple tax notices relating to its operations across various jurisdictions.

 

Key Highlights:

 

The original GST demand, issued by the Office of the Additional Commissioner, Central Goods & Services Tax (CGST), Delhi East, alleged improper cross-charging of expenses incurred at KEI’s head office to its branches and units for the financial years 2017-18 to 2020-21. The demand included an equal penalty and interest, raising the total liability to over ₹118 crore.

 

KEI Industries consistently maintained that the demand was unjustified and assured stakeholders that the matter would not materially impact its financial or operational health. The company promptly initiated legal proceedings to challenge the order, citing compliance with GST provisions and industry practices.

 

The quashing of the ₹590.4 million tax demand reaffirms KEI’s compliance stance and removes a significant overhang from its balance sheet, boosting investor confidence. The company is now better positioned to focus on its growth initiatives and expansion plans without the distraction of a major tax dispute.

 

This outcome underscores the importance of robust internal controls and transparent accounting practices in navigating complex tax regulations, especially for large corporates with multi-state operations.

 

Sources: Angel One, MarketScreener, Reuters