TeamLease Receives Interim Relief from Karnataka High Court in Rs 32.29 Crore GST Penalty Dispute

TeamLease Services Limited has informed the stock exchanges of India (National Stock Exchange of India Limited and Bombay Stock Exchange Limited) that it has received an interim order dated June 17, 2026, from the Karnataka High Court in relation to a Writ Petition No. 18126/2026.

The company has disclosed this information through a SEBI intimation dated June 22, 2026, in pursuance of Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“SEBI Listing Regulations”), which is in continuation of earlier intimations filed by it on May 06, 2026, and June 12, 2026.

The company had filed the writ petition on June 12, 2026, challenging an order-in-appeal dated January 30, 2026, from the Commissioner of CGST and Central Excise (Appeals-III), Mumbai.

The said order-in-appeal was issued as a result of the proceedings initiated pursuant to a probe conducted by the Directorate General of GST Intelligence. The concerned tax authorities had alleged that the company had issued invoices without the supply of services in respect of manpower services rendered by it during the period from July 2017 to July 2022. Accordingly, a penalty amounting to approximately Rs 32.29 crore was imposed under Section 122(1)(ii) read with Section 74 of the CGST Act, 2017.

However, the company strongly denied the claims made by the tax authorities and claimed that it had rendered manpower services, issued valid GST invoices, processed payment of salaries along with applicable statutory deductions, and discharged the requisite GST. It was further claimed that each transaction was properly shown in the statutory returns and financial statements. According to the company, the impugned order was unfair and violated principles of natural justice, hence liable to be quashed.

The company also flagged that similar transactions were examined by the Income Tax Department during reassessment proceedings, which were ultimately closed without any adverse findings.

TeamLease Services has clarified that while the penalty has been upheld, no tax demand has been raised, and there is currently no material impact on its operations. The company has stated that it will continue pursuing legal remedies before the Karnataka High Court in the present case and will keep the stock exchanges informed about any significant developments in the case.