IRFC gets GST Demand Notice of Rs.231 Crore from Tamil Nadu Tax Authority

The Indian Railway Finance Corporation (IRFC) announced on Wednesday that it has received a goods and services tax demand order of Rs.230.55 crore from the Tamil Nadu Tax Authority.

The assistant commissioner of the sales tax division in Chennai North issued the notice, which included a tax demand of Rs 209.59 crore and a penalty of Rs.20.96 crore, according to an IRFC exchange filing.

The public sector firm further stated that “the officer has disallowed certain GST credits and issued GST demand for the reverse charge mechanism for the financial year 2020-21.”

However, the IRFC stated that based on its evaluation, “the abovementioned demand is not maintainable, and the Company is looking into all options, including filing an appeal against the order”.

According to the company’s statement, “there is a provision for recoverably of taxes/adjustments under Leasing Arrangement with Ministry of Railways”.

The IRFC said that the tax demand notice had no meaningful impact on its financials, operations, or other activities.

Earlier this month, the government-owned company informed the exchanges that Ajoy Choudhury has been appointed as its chief risk officer, effective December 2, and that he will serve on a contractual basis for a fixed two-year period.

Last month, the IRFC board approved to finance 20 rakes worth Rs.700 crore for NTPC Ltd. The 20 rakes were bought under the general-purpose waggon investment scheme scheme under the Ministry of Railways.

In the quarter ended September 30, IRFC’s net profit increased by 4.4% to Rs.1,613 crore from Rs.1,545 crore in the same period last year. In the July-September quarter, the corporation’s income increased by 2% to Rs.6,900 crore, up from Rs.6,762 crore the previous year.

IRFC shares closed 5.14% higher on the NSE at Rs.164.91 per share, while the benchmark Nifty 50 fell 0.13%.