Isgec Heavy Engineering has received a penalty order from the Central Goods and Services Tax (CGST) authorities, marking a significant regulatory compliance development for the engineering company. The penalty order was issued by the Superintendent CGST, Raipur on December 31, 2025.

Penalty Details and Financial Impact

The regulatory action involves multiple financial components that collectively impact the company's finances:

The penalty order was received on December 31, 2025 at 11:54:00 hours, as documented in the company's regulatory filing.

Nature of Alleged Violation

The Superintendent CGST, Raipur has levied the tax demand alleging inadmissible Input Tax Credit that was wrongly availed and utilized by the company. This action has been taken under Section 73(1) of the CGST Act, which deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized.

The tax demand of ₹12,93,512 forms the major portion of the total financial impact, with the penalty amount representing approximately 10% of the primary tax demand.

Company's Response Strategy

Isgec Heavy Engineering has outlined its approach to address the regulatory order. The company has stated that it shall file an appeal under the Goods and Services Tax Act to contest the penalty and tax demand imposed by the CGST authorities.

This legal recourse allows the company to present its case before higher tax authorities and seek relief from the imposed penalty and tax demand. The appeal process under the GST framework provides companies with an opportunity to challenge adverse orders through proper legal channels.

ISGEC Heavy Engineering has received a significant GST penalty order from tax authorities, highlighting regulatory compliance challenges faced by the engineering company. The penalty order was issued by the Assistant Commissioner (C.Tax), East Division 3, Bangalore East Commissionerate, and was received by the company on December 30, 2025.

Penalty Details and Authority

The tax authorities have imposed a penalty of ₹17.33 lakh on the company following their assessment of GST compliance issues. The order originates from the Assistant Commissioner of Central Tax office in Bengaluru, which has jurisdiction over the company's tax matters in the region.

Nature of Violation

The penalty has been levied due to issues with the company's GST return filing and reconciliation processes. Specifically, the Assistant Commissioner found that the reconciliation reported in Column 12F of GSTR-9C was not acceptable to the department. This led to the issuance of the penalty order, indicating discrepancies in the company's GST compliance documentation.

The GSTR-9C is an annual return reconciliation statement that companies are required to file, and Column 12F typically contains crucial reconciliation data that tax authorities scrutinize for compliance verification.

Financial Impact

The total financial impact on ISGEC Heavy Engineering extends beyond just the penalty amount. The company faces a comprehensive financial burden from this tax order:

This substantial financial impact represents a significant regulatory cost for the company and may affect its operational cash flows in the near term.

Company's Response Strategy

In response to the penalty order, ISGEC Heavy Engineering has announced its intention to challenge the decision through proper legal channels. The company plans to file an appeal against this order under the provisions of the Goods and Services Tax Act. This appeal process will allow the company to present its case and potentially seek relief from the imposed penalty and tax demand.

The appeal mechanism under the GST Act provides companies with an opportunity to contest orders they believe are incorrect or disproportionate, ensuring due process in tax dispute resolution.