Vedanta Iron & Steel subsidiary receives ₹39.58 Cr GST show-cause notice
- ESL Steel received a ₹39.58 crore show-cause notice from GST authorities in Ranchi
- The notice alleges wrongful ITC availment on credit notes for FY21 to FY23
- Demand comprises IGST, CGST, SGST, and cess plus interest and penalties
- Vedanta Iron & Steel expects no material financial or operational impact
*this image is generated using AI for illustrative purposes only.
Vedanta Iron & Steel Limited disclosed that its subsidiary, ESL Steel Limited, received a demand-cum-show cause notice from the Principal Commissioner of Central Goods and Services Tax & Central Excise, Ranchi, on August 27, 2026.
The notice proposes a recovery of ₹39.58 crore, alleging wrongful availment and utilization of Input Tax Credit (ITC) related to credit notes during FY20-21 to FY22-23.
Notice Details
The tax department issued the notice at approximately 3:24 pm on August 27, 2026. It follows an earlier intimation under Form GST DRC-01A dated August 13, 2026. The company must submit its response within the prescribed timeline.
| Tax Component | Amount (₹) |
|---|---|
| IGST | 29,16,89,049 |
| CGST | 3,26,41,238 |
| SGST | 3,26,41,238 |
| Cess | 3,88,61,019 |
| Total Proposed Recovery | 39,58,32,544 |
The total amount includes applicable interest and penalty alongside the principal tax demands.
Company Response
ESL Steel is examining the notice and intends to take appropriate legal steps in accordance with applicable laws. Vedanta Iron & Steel stated it does not envisage any significant financial or operational impact from this development.
This disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Historical Stock Returns for Vedanta Iron & Steel
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.42% | -4.36% | +9.45% | 0.0% | 0.0% | 0.0% |
How might the outcome of this GST dispute influence Vedanta Iron & Steel's future tax compliance strategies and internal audit processes?
What is the potential impact on ESL Steel's cash flow and liquidity if the ₹39.58 crore recovery is enforced before any legal appeal is resolved?
Could this notice trigger similar GST scrutiny from authorities for other subsidiaries within the Vedanta group?
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