JK Tyre & Industries Faces ITC Reversal Setback, Plans to Challenge GST Ruling

JK Tyre & Industries Limited, the tyre manufacturers in India, has recently informed about the receipt of an order dated July 15, 2025, from the GST Authorities. The company has disclosed the same to the stock exchanges (NSE and BSE).

The Company, in its letter dated March 17, 2024, informed that it had received an order from the GST Authorities to reverse input tax credit of Rs. 8.78 crores, along with interest and a penalty of Rs. 8.78 crores. In total, this was a financial implication of about Rs. 17.56 crores. The issue was related to the ITC claimed on machinery lease rentals.

The company, i.e., JK Tyre & Industries Limited, believed that the order was not fair and not in compliance with the rules and hence filed an appeal against the order on May 29, 2024, with the Commissioner (Appeals), CGST and Central Excise, Bhopal.

However, the Commissioner (Appeals) has rejected the appeal of the company, meaning the previous order still stands. Therefore, JK Tyre & Industries Limited is still required to reverse the ITC and pay the related penalty and interest.

The company has decided to challenge this to higher authorities as it still believes it has a strong legal reason. Additionally, the company stated that there is no major impact on its financial status, operations, or day-to-day business activities due to this order. Essentially, while the problem is a legal and accounting matter, it’s not large enough to disturb the company’s overall health or performance.

Other than the reversal of tax credits and the financial demand, there were no penalties, restrictions, or notices for non-compliance. The company has not done anything seriously wrong according to this order. It is mainly a disagreement about how tax benefits were claimed, and now it is turning into a legal issue.