Penalty Payout: Shriram Finance’s ₹27.7 Lakh GST Fine, But Business Marches On

Shriram Finance Limited has disclosed that it received an order dated December 16, 2025, from the Office of the Deputy Commissioner, State Tax, Lucknow, Uttar Pradesh. The order levies a penalty of ₹27,70,732 in connection with show cause and demand notices originally issued to erstwhile Shriram City Union Finance Limited, which was amalgamated with Shriram Finance effective April 1, 2022. The penalty has been imposed under Section 73 of the Central Goods and Services Tax Act, 2017, read with the Integrated Goods and Services Tax Act, 2017.

The company has informed the stock exchanges that the total demand comprises ₹2,77,07,316 in GST, ₹1,88,56,157 in interest, and the aforementioned penalty. The violations cited in the order include short payment of GST due to differences in tax rates on scrap sales, non-payment of GST under reverse charge on incentives paid to recovery employees, and availing ineligible input tax credit. Additional contraventions involve delayed ITC claims, non-submission of supporting invoices, and GST demands on payments to direct selling agents not discharged under the reverse charge mechanism.

Despite the penalty, Shriram Finance stated that there is no material impact on its financial or operational activities. The company is currently awaiting a tax consultant’s opinion regarding the Uttar Pradesh state demand order before deciding on further action.

Key Highlights:
- Penalty of ₹27.7 lakh imposed by Uttar Pradesh State Tax Authority for GST-related contraventions.  
- Total demand: ₹2.77 crore GST, ₹1.88 crore interest, and ₹27.7 lakh penalty.  
- Violations include short GST payments, ineligible ITC claims, and non-payment under reverse charge.  
- No material impact on company’s financials or operations.  
- Company is reviewing the order with its tax consultant for next steps.  

Source: Shriram Finance Limited Corporate Announcement, NSE/BSE Regulatory Filing, December 17, 2025