GST Department Appeals Against Rs 368.72 Crore Penalty Relief Granted to Tata Steel Limited

Tata Steel Limited had earlier informed the stock exchanges of India about the receipt of a show cause notice (SCN) dated June 27, 2025, from the Office of the Commissioner (Audit), Central Tax, Ranchi.

The notice had proposed a demand of Rs 1007.54 crore on the company along with interest/penalty by disallowing Input Tax Credit (ITC) in violation of the provisions of Section 74(1) of the Central Goods and Services Tax Act, 2017/State Goods and Services Tax Act, 2017, read with Section 20 of the Integrated Goods and Services Tax Act, 2017, for the Financial Year 2018-19 through Financial Year 2022-23.

Through the notice, the company was asked to show cause for the notice, explaining why the aforementioned action should not be taken against it. As per the company, it had already paid GST of Rs 514.19 crore from the total proposed demand; consequently, the remaining demand left was Rs 493.35 crore, and the dispute was on the same. The company had filed a detailed reply to the SCN within the time limit prescribed in the same.

Later, on December 19, 2025, Tata Steel Limited made another disclosure about the receipt of an Adjudication Order dated December 18, 2025, from the Commissioner of CGST & Central Excise, Jamshedpur, Jharkhand. The order had confirmed the demand of Rs 493.35 crore on the company, along with a penalty of Rs 638.83 crore and appropriate interest on the total amount of tax. In the said order, the Adjudicating Authority had dropped the penalty of Rs 368.72 crore (proposed previously in the SCN).

Thereafter, on March 11, 2026, the company filed a writ petition before the Honourable High Court of Jharkhand, challenging the order dated December 18, 2025, issued by the Commissioner of CGST & Central Excise, Jamshedpur, and prayed the court to quash the order.

The company had disclosed the aforementioned details through an intimation dated March 12, 2026, under Regulations 30 and 51 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.

Presently, the company has made another disclosure via an intimation dated June 26, 2026, informing that the Assistant Commissioner, Division-I, CGST & Central Excise, Jamshedpur, Jharkhand (GST Department), filed an appeal before the Commissioner (Appeals) of CGST & Central Excise, Ranchi, challenging the aforesaid adjudication order dated December 18, 2026, which had dropped the penalty of Rs 368.72 crore against the company. The appeal was filed on June 16, 2026. The appeal challenged only the part of the order that removed the proposed penalty.

The company stated that the issue is linked to the validity of multiple show-cause notices, which is currently pending before the Honourable High Court. The final outcome of the penalty issue will depend on the HC’s order, as the matter is still under judicial consideration. The company believes that it has a strong case on its merits and will challenge the appeal before the appellate authority within the prescribed legal timeline.

The company further clarified that the present action does not have any impact on its financial, operational and business activities.