The Supreme Court dismissed the GST department’s special leave petition against Siemens Limited on August 20, 2026, concluding long-standing litigation over a tax demand.

The apex court’s order effectively upholds the Gujarat High Court’s earlier decision to quash the show cause notice issued by the Joint Commissioner, Central GST & Excise, Vadodara I Commissionerate.

Litigation Background

The dispute originated from a show cause notice proposing a levy of ₹34.83 crore along with applicable interest and penalty under Section 74 of the Central Goods and Services Tax Act, 2017. The notice related to the transfer and assignment of the company’s leasehold interest in a property located in Halol, Gujarat.

Siemens Limited had initially disclosed receipt of this notice in September 2025. The Gujarat High Court subsequently quashed the notice, an update reported by the company in November 2025.

Resolution Details

Following the High Court’s ruling, the GST Department filed a Special Leave Petition (SLP) before the Supreme Court challenging the lower court’s order. The Supreme Court dismissed this petition, thereby concluding the legal proceedings in favor of Siemens Limited.

The company received the order around 3:30 pm on August 20, 2026. This resolution removes the potential financial liability associated with the disputed tax demand.

Siemens Limited reported a consolidated net profit of ₹2,143 crore for the first quarter ended June 30, 2026, marking a significant jump from ₹423 crore in the corresponding period of the previous year. The surge was largely attributable to a one-time provisional gain of ₹2,099 crore recognized from the sale of its Low Voltage Motors (LVM) business to Innomotics India Private Limited. This transaction, completed on June 1, 2026, involved a cash consideration of ₹22,000 million and has been classified under discontinued operations. Consequently, the company's overall profitability for the quarter was heavily influenced by this non-recurring item rather than operational performance.

Operational results showed mixed trends. Revenue from operations for continuing businesses rose 14.8% year-on-year to ₹4,714 crore, supported by strong demand across Smart Infrastructure and Mobility segments. However, EBITDA declined to ₹4.3B from ₹5.2B in the year-ago period, with EBITDA margin contracting to 9.14% from 12.00% year-on-year. Profit from operations also declined to ₹356 crore, or 7.6% of revenue, compared to ₹452 crore, or 11.0%, in Q1FY26. Sunil Mathur, Managing Director and Chief Executive Officer, attributed the margin compression to volatility in commodity prices, foreign exchange movements, and increased material costs. Despite these headwinds, the company recorded new orders worth ₹6,328 crore, up 16.5% from ₹5,431 crore in the prior year quarter. Adjusting for a large signaling order received in the previous year's comparison period, organic order growth stood at 43.9%.

Key Financial Highlights

The table below captures the key financial metrics for the quarter, reflecting both the headline profit impact from the LVM divestiture and the underlying operational performance.

Segment Performance

The Smart Infrastructure segment remained the primary growth driver, with robust demand in grid modernization projects, data centers, and commercial real estate. Consolidated segment revenue for Smart Infrastructure reached ₹26,325 million, contributing significantly to the top-line expansion. The Mobility segment also demonstrated good growth, particularly in the Rolling Stock business, reporting segment revenue of ₹9,329 million. Digital Industries maintained steady performance with revenue of ₹11,440 million, securing orders for automation solutions in solar cell manufacturing, metals, electronics, pharmaceuticals, and water sectors.

The order backlog grew by 9.6% to ₹46,670 crore, providing visibility for future revenue streams. The company noted that domestic demand remained strong, with both private and public sectors actively ordering. The Board of Directors also approved the Scheme of Amalgamation of Siemens Rail Automation Private Limited (SRAPL), a wholly owned subsidiary, with the holding company, subject to regulatory approvals from the National Company Law Tribunal.

What the Numbers Show

A critical observation from the filing is the divergence between top-line growth and operational profitability. While revenue expanded by nearly 15%, EBITDA declined from ₹5.2B to ₹4.3B year-on-year, with EBITDA margins narrowing from 12.00% to 9.14%. Operating profits similarly contracted by approximately 21% year-on-year, indicating that revenue growth was not fully accretive to margins, likely due to the lagged impact of higher input costs and foreign exchange depreciation mentioned by management. The reliance on a single large transaction—the LVM sale—for the majority of the bottom-line improvement highlights the transitional nature of the company's portfolio.