Archive · 21 May 2025
JSW Steel Faces Potential Tax Reversal After BPSL Deal Scrapped
JSW Steel might have to give back some tax breaks it received after buying Bhushan Power and Steel (BPSL).
The Supreme Court canceled the deal.
When a company buys another under the bankruptcy laws, it can use the losses of the purchased company to pay less taxes.
JSW Steel took over BPSL and used its losses to lower its tax bill.
BPSL made profits after being taken over, but the Supreme Court’s decision could mean the tax benefits are reversed.
JSW Steel faces potential reversal of tax benefits after the Supreme Court scrapped its Bhushan Power and Steel (BPSL) acquisition.
The acquisition allowed JSW Steel to offset BPSL's past losses against future profits.
The Income Tax Department may reopen BPSL's assessment due to the Supreme Court ruling.
BPSL, a subsidiary of JSW Steel, had losses of approximately ₹7,000 crore.
BPSL posted profits in FY22, FY23 and FY24 after being acquired, claiming tax benefits.
- Who
- JSW Steel, Bhushan Power and Steel (BPSL), and the Income Tax Department are involved.
- What
- JSW Steel may lose tax benefits from its acquisition of Bhushan Power and Steel (BPSL) due to a Supreme Court decision.
- When
- The Supreme Court rejected JSW Steel's resolution plan on May 2.
- Where
- The events concern BPSL's operations and JSW Steel's acquisition.
- Why
- The Supreme Court cited non-compliance when it rejected the resolution plan, which could lead to the reversal of tax benefits.
- Company
- JSW Steel
- Involved Company
- Bhushan Power and Steel (BPSL)
- Losses of BPSL
- ₹7,000 crore
- JSW Steel Takeover Cost
- ₹19,350 crore
- BPSL Profit FY22
- ₹4,258 crore
- BPSL Profit FY23
- ₹160 crore
- BPSL Profit FY24
- ₹674 crore
- BPSL expenditure for capacity increase
- ₹3,640 crore