Tata Steel Wins Breather As Supreme Court Hits Pause On Rs 8,900-Crore GST Battle

Nikunj Parikh May 21, 2026 330 Views

The Supreme Court has issued notice and granted a stay on further proceedings in Tata Steel’s Rs 8,905 crore input tax credit dispute, offering interim relief in one of the largest GST-related demands on a major Indian corporate. The case outcome could have significant implications for tax credit treatment under India’s GST regime.

Tata Steel Limited has informed exchanges that the Supreme Court has stayed all further proceedings in an ongoing GST input tax credit (ITC) dispute, arising from a demand and show cause notice issued by the CGST and Central Excise authorities in Jamshedpur. The matter pertains to alleged irregular ITC claimed between FY2018-19 and FY2020-21.

Background To The Gst Itc Demand

In June 2025, Tata Steel received a demand-cum-show-cause notice alleging irregular availing of ITC of Rs 8,905.21 crore for FY2018-19 to FY2020-21. The adjudicating authority later confirmed the entire tax demand, an equal amount as penalty and applicable interest, without accepting the company’s detailed submissions.

Company’s Legal Stand And High Court Route

Tata Steel maintains there was no excess ITC, arguing the difference stems mainly from credits of one year availed in the subsequent year, which it says is permissible under GST laws. The company also contends the notice is without jurisdiction and time-barred. A writ petition before the Jharkhand High Court was disposed of in April 2026 with liberty to approach the appellate authority.

Supreme Court Intervention And Current Status

Aggrieved by the High Court order, Tata Steel filed a Special Leave Petition before the Supreme Court. Following a hearing on 19 May 2026, the apex court has now issued notice to the respondents and stayed all further proceedings in the matter until the next hearing date, effectively freezing enforcement of the demand for now.