Vikran Engineering receives GST show cause notice for ₹1.89 Cr demand
- Vikran Engineering received a GST show cause notice dated September 11, 2026
- Total demand stands at ₹1.89 crore comprising ₹1.71 crore tax and ₹17 lakh penalty
- Allegations relate to excess input tax credit availed on reverse charge supplies in FY23
- Company states no material impact on finances or operations is expected
- Response to the notice will be filed within the stipulated timeframe
*this image is generated using AI for illustrative purposes only.
Vikran Engineering received a show cause notice from the GST department demanding ₹1.89 crore for alleged excess input tax credit availment during FY23. The notice was issued by the Assistant Commissioner in Indore under Section 73 of the CGST Act, 2017.
The company disclosed the receipt of the notice on September 17, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The demand arises from inward supplies liable to reverse charge mechanism.
Notice Details
The show cause notice (Form GST DRC-01), dated September 11, 2026, specifies the following financial demands:
| Component | Amount |
|---|---|
| Tax Demand | ₹1,71,20,276 |
| Penalty | ₹17,12,027.599 |
| Total Demand | ₹1.89 crore |
The allegations specifically cite excess availment of input tax credit on account of inward supplies liable to reverse charge during the fiscal year 2022-2023.
Company Response
Vikran Engineering stated that it does not foresee any material impact on its financial, operational, or other activities due to this notice. The company confirmed it will respond to the authority within the specified time period.
What the Numbers Show
The penalty amount of ₹17.12 lakh represents exactly 10% of the principal tax demand of ₹1.71 crore. This fixed percentage penalty structure suggests the department has classified the discrepancy as a standard compliance lapse rather than a willful evasion, which typically attracts higher punitive rates under the CGST Act.
Historical Stock Returns for Vikran Engineering
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.55% | -2.31% | -9.96% | -6.46% | -48.80% | -41.17% |
How might the outcome of this GST dispute influence Vikran Engineering's future compliance audits and internal tax control mechanisms?
Could this notice trigger a broader regulatory scrutiny of other engineering firms in the sector regarding reverse charge mechanism inputs?
What is the expected timeline for the company's response and potential appellate proceedings, and how might this affect investor sentiment?
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