1 week ago
Supreme Court Quashes Tata Steel’s ₹890 Crore GST Demand
Tata Steel was involved in a disagreement with tax officials over GST payments.
Officials said the company had wrongly claimed ₹890.52 crore in input tax credit.
Tata Steel disagreed and said the credit was claimed later than the year it related to, which it believed GST rules allowed.
The tax department had demanded the money, an equal penalty and interest.
Tata Steel challenged the decision in court.
The Supreme Court cancelled the current demand and penalty.
However, tax officials may start the case again if they follow the court’s instructions.
Any new decision must be issued by February 28, 2027.
The Supreme Court quashed Tata Steel’s ₹890.52 crore GST demand, equal penalty and applicable interest.
The dispute concerned input tax credit allegedly claimed irregularly between financial years 2018-19 and 2020-21.
Tata Steel argued the credit belonged to one financial year but was claimed in a later year under GST rules.
The court overturned the June 2025 show-cause notice and December 2025 order issued by Jamshedpur tax authorities.
The Tax Department may begin fresh proceedings under Section 74 of the CGST Act, with any new order due by February 28, 2027.
- Who
- Tata Steel and CGST and Central Excise authorities in Jamshedpur.
- What
- The Supreme Court quashed an ₹890.52 crore GST demand, an equal penalty and applicable interest against Tata Steel.
- Where
- The original proceedings were conducted by CGST and Central Excise authorities in Jamshedpur, and the appeal reached the Supreme Court.
- When
- The Supreme Court heard the appeal on August 19 and delivered its judgment on August 25; any fresh order must be passed by February 28, 2027.
- Why
- The dispute concerned alleged irregular input tax credit claims between financial years 2018-19 and 2020-21.
Tata Steel’s Position
Tax Department’s Position
Validity of input tax credit
Tata Steel’s Position
Tata Steel said it had not claimed excess input tax credit and argued that credit related to one financial year could be claimed in a subsequent year under GST provisions.
Tax Department’s Position
Tax authorities alleged that Tata Steel had irregularly claimed ₹890.52 crore in input tax credit between financial years 2018-19 and 2020-21.
Legal proceedings
Tata Steel’s Position
Tata Steel challenged the demand on grounds including jurisdiction and limitation and pursued an appeal before the Supreme Court.
Tax Department’s Position
The authorities confirmed the demand in December 2025 and imposed an equal penalty, while the Supreme Court left limited scope for proceedings under Section 74 of the CGST Act.
Key facts
- GST demand quashed
- ₹890.52 crore
- Penalty quashed
- ₹890.52 crore, equal to the tax demand
- Total demand and penalty
- About ₹1,781 crore, excluding interest
- Disputed issue
- Input tax credit claimed between financial years 2018-19 and 2020-21
- Original notice
- Issued in June 2025 by the Jamshedpur CGST and Central Excise commissioner’s office
- Original order
- Issued in December 2025, confirming the demand and penalty
- Deadline for fresh order
- February 28, 2027
Quotes
Tata Steel
The steelmaker that disclosed the Supreme Court ruling in a regulatory filing
“Accordingly, the tax demand of ₹890,52,10,202/-, penalty of ₹890,52,10,202/- and the applicable interest thereon stands quashed,”
livemint.com
Sources
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