Mumbai: JSW Cement has received a show-cause notice proposing a GST demand of Rs 81.03 crore, along with interest and an equivalent penalty, over alleged tax violations between FY21 and FY23.
The notice was issued by the Office of the Additional Commissioner, Central Tax (Audit), Guntur, on August 20. JSW Cement disclosed the matter to stock exchanges on August 21.
What authorities alleged?
The notice was issued under Section 74 of the Central Goods and Services Tax Act, 2017, read with provisions of the Andhra Pradesh GST Act.
Tax authorities alleged that JSW Cement irregularly reduced post-sale discounts from taxable value without meeting conditions. They questioned reductions in tax liability linked to credit notes.
Other allegations include short payment of GST due to incorrect classification and use of a wrong tax rate. Authorities cited failure to provide proof that supplies to special economic zone units were meant for authorised operations.
Input tax credit questioned
The notice raises several issues concerning input tax credit. These include invoices not appearing in GSTR-2A or GSTR-2B, suppliers not filing GSTR-3B, and excess credit distributed by an Input Service Distributor.
It refers to credit claimed under CGST and APGST instead of IGST, or the other way around. Other concerns include blocked credit, claims made after the permitted deadline and bills of entry linked to a GST registration number.
Demand and company response
The proposed demand comprises Rs 48.27 crore in IGST and Rs 16.38 crore each in CGST and APGST. Authorities have proposed interest and a penalty equal to the tax demand.
The notice further alleges non-payment of tax under the reverse-charge mechanism and interest for delays in filing returns. It covers irregular input tax credit that was claimed and used.
JSW Cement said the financial impact is limited to the proposed demand, penalty and interest. However, the company maintained that the notice would not have a material impact. It is now preparing a reply to contest the matter.
