Tata Steel has received regulatory approval from the Competition Commission of India (CCI) to acquire complete control over Tata BlueScope Steel, marking a significant development in the company's corporate restructuring initiatives. The approval allows the steel major to proceed with gaining full ownership of the joint venture entity.

Regulatory Approval Details

The CCI's clearance represents a crucial regulatory milestone for Tata Steel's acquisition plans. This approval enables the company to move forward with consolidating its operations by taking complete control of Tata BlueScope Steel, which was previously operated as a joint venture.

Strategic Implications

The acquisition of complete control over Tata BlueScope Steel will provide Tata Steel with enhanced operational flexibility and strategic control over the joint venture's operations. This consolidation aligns with the company's broader corporate strategy to streamline its business operations and strengthen its position in the steel sector.

Corporate Restructuring Impact

This regulatory approval facilitates Tata Steel's ongoing corporate restructuring efforts, allowing the company to integrate Tata BlueScope Steel's operations more effectively within its organizational framework. The move is expected to provide greater operational synergies and improved decision-making capabilities for the combined entity.

The CCI's approval removes a key regulatory hurdle, enabling Tata Steel to proceed with the transaction and complete its acquisition of full control over the joint venture partnership.

Tata Steel has secured a significant victory in a GST compensation cess dispute, with authorities setting aside the entire tax demand of ₹161.52 crores and imposing no penalty on the company.

Favourable GST Order Details

Tata Steel received a favourable order from the Joint Commissioner of CGST Central Excise, Jamshedpur, Jharkhand. The order provides complete relief to the company in a compensation cess matter that had been under adjudication.

Background of the Case

The dispute originated from a show cause notice issued by the Directorate General of GST Intelligence, Regional Unit, Jamshedpur. The notice was issued against erstwhile Tata Steel Long Products Limited (TSLP), which amalgamated with Tata Steel effective November 15, 2023, through a scheme of amalgamation.

The GST authorities had raised concerns about input tax credit compensation cess amounting to ₹161.52 crores allegedly irregularly availed by TSLP during April 2019 through February 2024. The show cause notice also questioned:

• Input tax credit of compensation cess amounting to ₹160.28 crores claimed to be already reversed/deposited via GSTR-3B returns of December 2022 and August 2023
• Potential penalty of ₹161.52 crores on the company

Authority's Decision

The Joint Commissioner took cognizance of the fact that Tata Steel had already paid the necessary GST amount of ₹160.28 crores while filing its GST returns. This amount was appropriated to the government exchequer. Additionally, the balance tax demand of ₹1.23 crores was dropped by the authority.

Regulatory Compliance

Tata Steel made this disclosure in compliance with Regulations 30 and 51 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company had previously disclosed the receipt of the show cause notice and has now updated stakeholders following the management's evaluation of the favourable order.

This resolution eliminates a significant contingent liability for Tata Steel and provides clarity on the GST compensation cess matter related to its amalgamated entity.