Mumbai: Tata Steel on Sunday said it has received a show-cause-cum-demand notice from the tax authorities over alleged irregularities in the utilisation of input tax credit amounting to over ₹1,000 crore for the financial years 2018-19 to 2022-23.

In a regulatory filing, the company informed that the notice was issued on June 28 by the Office of the Commissioner (Audit), Central Tax, Ranchi.

"On June 28, Tata Steel Limited received a Show Cause cum demand Notice dated June 27, issued by the Office of the Commissioner (Audit), Central Tax, Ranchi, proposing to disallow/demand primarily on account of alleged irregular availment of Input Tax Credit in contravention of the provisions of Section 74(1) of the Central Goods and Services Tax Act, 2017/State Goods and Services Act, 2017 read with Section 20 of the Integrated Goods and Services Tax Act, 2017, for the period FY2018-19 through FY2022-23," the firm said in its filing.

The tax department has directed Tata Steel to explain, within 30 days, why GST amounting to ₹1,007.54 crore should not be demanded and recovered from the company.

The response is to be submitted before the Additional or Joint Commissioner of Central GST.

As per the notice, Tata Steel allegedly availed input tax credit in violation of GST provisions, specifically Section 74(1) of the Central Goods and Services Tax Act, 2017, and Section 20 of the Integrated Goods and Services Tax Act, 2017.

Tata Steel, however, clarified that it has already paid ₹514.19 crore in GST during the normal course of business.

This amount is proposed to be adjusted in the notice, reducing the company’s actual tax exposure to about Rs 493.35 crore.

The company has said it believes the notice is without merit and will present its case before the authorities within the given deadline.

Tata Steel also stated that this matter does not affect its financial, operational, or other business activities.

Under the GST system, businesses can claim input tax credit on the taxes paid for purchases used in the production of goods or services. This credit helps in reducing their overall tax liability. IANS