Vedanta Limited receives Rs.1.71 Crore Penalty over Cenvat Credit issues for FY18

Vedanta Ltd has got two orders from the Office of GST and Central Excise imposing a Rs 1.71 crore penalty, tax demand, and interest.

The Office of the Assistant/Deputy Commissioner, Jharsuguda Division, issued these orders that address the carryforward of cenvat credit on capital goods and the use of transitional credit under Tran-1 during the financial year 2017-18 (FY18).

According to a report submitted to the stock exchanges on Monday, the company got the orders on December 9, 2024, which affirm the penalty amount. Vedanta aims to challenge the orders to the appellate authorities.

The company has stated that the penalty is not likely to have a significant financial impact on its operations.

The dispute is on Vedanta’s treatment of transitional credit during the GST regime’s rollout in FY18. The orders, dated November 28, 2024, address the company’s handling of cenvat credit and subsequent carryforward—critical components of GST-related accounting standards.

In its second-quarter financial report for FY25, Vedanta recorded a 3.4% decrease in revenue, down to Rs.37,634 crore from Rs.38,945 crore in the same period last year. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) declined 14% to Rs.9,828 crore from Rs.11,479 crore. The EBITDA margin fell to 26.1 percent, from 29.5%.