JSW Cement Receives GST Demand-cum-Show Cause Notice from Patna Tax Authority
JSW Cement Limited received a Demand-cum-Show Cause Notice from the Additional Commissioner Central Tax (Audit), Patna, issued under Section 74 of the CGST Act, 2017, covering alleged GST irregularities across FY 2020-21 to FY 2022-23. The notice proposes a total GST demand of approximately Rs. 7,55,84,148/-, comprising IGST of Rs. 1,21,54,554/-, CGST of Rs. 3,17,14,797/-, and SGST of Rs. 3,17,14,797/-, along with applicable interest and penalty. The allegations include issues related to credit notes, unreconciled tax liabilities, deemed supply, trade discounts, excess ITC, and failure to discharge RCM liability. The company has disclosed that it is in the process of filing a reply in the matter.
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JSW Cement Limited has disclosed the receipt of a Demand-cum-Show Cause Notice from the Office of the Additional Commissioner Central Tax (Audit), Patna, pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended. The notice was issued under Section 74 of the CGST Act, 2017, and the disclosure was made on 15.05.2026. The company has informed the stock exchanges that it is in the process of filing a reply in the said matter.
Nature of Allegations
The Show Cause Notice covers multiple alleged tax irregularities spanning fiscal years FY 2020-21 to FY 2022-23. The department has raised a series of contentions related to GST compliance across several areas. The key allegations outlined in the notice are as follows:
- Credit Notes of GSTR-9C (FY 2020-21): The department alleges that the company reported values under Table-5J (credit notes not permissible under GST) in GSTR-9C but failed to pay GST thereon, treating the same as taxable outward supplies, on the premise that such credit notes fall outside Section 34.
- Unreconciled Tax Liability between books of accounts and GSTR-9 (FY 2020-21): Alleged discrepancy between the tax liability as per books and as per GST returns.
- Deemed Supply (FY 2021-22): The department contends that the company declared "deemed supplies" (Schedule I transactions) in GSTR-9C but failed to substantiate the same with invoices or payment of GST, thereby treating the declared amount as taxable turnover.
- Trade Discount (Multiple Years): It is alleged that trade discounts reported in GSTR-9C are not permissible deductions under GST and should form part of taxable value, resulting in short payment of tax.
- Unreconciled Turnover between books of accounts and GST returns (FY 2022-23): Alleged mismatch between turnover reported in books and GST returns.
- Excess ITC availed — GSTR-2A vs GSTR-3B (FY 2020-21 to FY 2022-23): Alleged excess Input Tax Credit availed compared to what was available in GSTR-2A.
- Delay in filing/payment of GSTR-3B resulting in Interest on Delay in Payment (FY 2020-21): Interest liability arising from delayed filing and payment.
- Difference in tax declared between GSTR-1 vs GSTR-3B: Alleged short payment of GST arising from discrepancies between the two returns.
- ITC on Wrong Place of Supply: Such ITC has been deemed ineligible under GST provisions.
- Failure to discharge RCM Liability (FY 2020-21 to FY 2022-23): Alleged non-payment of Reverse Charge Mechanism liability.
Proposed Financial Demand
The Show Cause Notice proposes a GST demand aggregating to approximately Rs. 7,55,84,148/-, in addition to applicable interest and penalty. The breakup of the proposed demand is as follows:
| Particulars: | Amount |
|---|---|
| IGST: | Rs. 1,21,54,554/- |
| CGST: | Rs. 3,17,14,797/- |
| SGST: | Rs. 3,17,14,797/- |
| Total GST Demand (approx.): | Rs. 7,55,84,148/- |
| Interest and Penalty: | Applicable |
The demand has been raised invoking the provisions of Section 9, Section 16, Section 37, Section 39, and Section 47 of the CGST Act, 2017, and the Rules thereunder.
Company Response
JSW Cement has stated that it is in the process of filing a reply to the Show Cause Notice. The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, and in accordance with the SEBI Master Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026. The information has also been uploaded on the company's website at www.jswcement.in .
Historical Stock Returns for JSW Cement
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.75% | -1.47% | -2.39% | -2.54% | -15.68% | -15.68% |
If JSW Cement's reply is rejected and the full demand of Rs. 7.55 crore plus interest and penalty is confirmed, what would be the potential total financial liability and how might it impact the company's upcoming quarterly earnings?
Given that the allegations span multiple GST compliance areas across FY 2020-21 to FY 2022-23, could this notice signal broader scrutiny of JSW Cement's GST practices in subsequent fiscal years, potentially leading to additional demands?
How might this GST demand notice affect JSW Cement's IPO plans or investor sentiment, particularly as the company navigates its public market positioning?
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