Vedanta Iron & Steel Limited subsidiary ESL Steel Limited received a Demand-cum-Show Cause Notice from the Office of the Superintendent, Central Tax, GST & Central Excise, Lathikata Range, Rourkela. The notice proposes recovery of ₹2.76 lakh in Integrated Goods and Services Tax (IGST) for the fiscal year 2022-23.

This latest disclosure follows a previous notice regarding CGST and SGST. The new filing, dated October 15, 2026, disclosed that ESL became aware of this specific IGST notice around 3:00 pm on October 14, 2026, upon accessing it on the GST portal. The dispute pertains to alleged short payment of IGST liability under the Reverse Charge Mechanism (RCM) arising out of differences between liabilities disclosed in GSTR-3B and GSTR-2B.

Nature of the Dispute

The tax authority has proposed the recovery of the principal IGST amount along with applicable interest and penalty. Unlike the earlier notice which split demand between CGST and SGST, this notice specifies a single IGST component.

The notice requires ESL to submit its response within the prescribed timeline. The company stated that it is examining the notice and will take appropriate steps in accordance with applicable laws.

Impact Assessment

Vedanta Iron & Steel Limited asserted that it does not envisage any significant financial or operational impact on the company due to this intimation. The disclosure was made pursuant to Regulation 30 read with Sub-para (8) of Para (B) of Part (A) of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

What the Numbers Show

The combined disclosed liability across both notices totals approximately ₹10.53 lakh for FY23. The earlier notice involved ₹7.77 lakh in CGST and SGST related to DMF and NMET contributions under RCM. The new notice adds ₹2.76 lakh in IGST related to GSTR-3B and GSTR-2B discrepancies under RCM. Both disputes are historical exposures from FY23 rather than current operational disruptions. Given the modest absolute value compared to typical steel sector liabilities, the company's stance of no material impact aligns with the scale of the disputed amounts.

Vedanta Iron & Steel Limited announced that its subsidiary, ESL Steel Limited, has been exempted from a monetary penalty following an adjudication order related to historical compliance violations. The exemption stems from the application of Section 32A of the Insolvency and Bankruptcy Code, 2016, shielding the entity from financial liability for past non-compliances.

The adjudication order, dated August 28, 2026, and received on September 30, 2026, addresses violations of Section 197(15) of the Companies Act, 2013. These violations pertain to the failure to disclose the ratio of directors' remuneration to median employee remuneration in Board Reports and Corporate Governance Reports during the financial years 2015-16 to 2017-18.

Regulatory Context and Exemption

The matter relates to the erstwhile management of ESL Steel. While the company itself was exempted from the penalty, former directors and Key Managerial Personnel (KMPs) have accepted the penalties mentioned in the notices. These individuals have undertaken to remit the amounts as directed by the Hon'ble Adjudicating Officer.

This development concludes the adjudication proceedings initiated under Section 454 of the Companies Act, 2013. The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Details of the Adjudication Order

What the Numbers Show

The exemption of ESL Steel from the penalty while individual ex-management personnel remain liable highlights the protective scope of Section 32A of the Insolvency and Bankruptcy Code. This section typically shields new management or entities that have undergone resolution processes from liabilities incurred by previous management, provided certain conditions are met. The distinction in liability between the corporate entity and the individuals underscores that the regulatory action targeted specific governance lapses by the former leadership rather than imposing a collective fine on the current operational entity.