JTEKT India Limited has received a favorable ruling from the Chennai Commercial Tax Department, with authorities dropping a significant GST demand that was previously raised against the company. The automotive components manufacturer announced this development through a regulatory filing on 30th January, 2026.

GST Demand Resolution Details

The company received an order from the Office of the Joint Commissioner (ST), Commercial Tax Department, Intelligence-II, Chennai, regarding a GST demand that was originally raised against JTEKT Sona Automotive India Limited, a subsidiary that has been amalgamated with JTEKT India Limited.

Company's Response and Outcome

JTEKT India had filed a comprehensive reply with the Commercial Tax Department SGST office Chennai, requesting the dropping of the GST demand of Rs. 3,63,25,998 that was raised through DRC-01. The company's response proved successful, as the tax authority accepted the reply and decided to drop the entire demand.

The original demand was raised under Section 74 of the Central Goods and Services Tax Act 2017, which typically relates to tax recovery in cases of suppression of facts or misstatement of facts. However, with the authority's acceptance of the company's explanation, the demand has been completely withdrawn.

Regulatory Compliance

The company has fulfilled its disclosure obligations under Regulation 30 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, by informing both BSE Limited and National Stock Exchange of India about this development. According to the filing, there is no quantifiable monetary impact on the company's financial, operational, or other activities from this resolution.

This favorable outcome provides relief to JTEKT India Limited, eliminating a potential financial liability and resolving the GST matter that was pending with the Chennai tax authorities.

JTEKT India Limited has secured a significant legal victory in its tax appeal case, with the Commissioner (Appeals) of CGST, Gurugram dropping a substantial demand of Rs. 2,40,83,954/-. The company received the favorable order on 29th January, 2026, and promptly informed the stock exchanges under Regulation 30 of SEBI listing regulations.

Case Background and Details

The original demand was raised on account of interest on supplementary invoices issued by the company for price escalation agreements with customers during the period from July 2017 to March 2020. The tax authorities had invoked provisions under Section 50(1) of CGST Act 2017 read with Rule 88B of CGST Rules, utilizing Section 74 of CGST Act to raise the demand.

Regulatory Compliance and Communication

The company has fulfilled its disclosure obligations by informing both BSE Limited (Scrip Code: 520057) and National Stock Exchange of India Ltd. (Symbol: JTEKTINDIA) about this development. This communication follows a previous intimation dated 2nd August, 2024, indicating the company had been actively pursuing this matter through the appeals process.

Financial Impact Assessment

According to the company's filing, the impact on financial, operational, or other activities has been classified as "Not Applicable" in monetary terms. This suggests that the favorable outcome does not require any immediate financial adjustments or provisions, as the demand has been completely dropped rather than reduced.

Legal Framework and Implications

The case involved supplementary invoices issued for price escalation agreements, which are common commercial practices where companies adjust pricing based on predetermined criteria with their customers. The tax authorities had sought to levy interest on these invoices under the CGST framework, but the appellate authority has ruled in favor of the company, providing relief from this substantial demand.

The successful appeal demonstrates the company's robust legal and compliance framework in handling tax matters and protecting shareholder interests through appropriate legal remedies.