Kalpataru Projects International Limited (KPIL) has encountered a setback in its ongoing Goods and Services Tax (GST) dispute, as the Appellate Authority upheld a penalty of INR 3.72 crores against the company. The decision, which KPIL received on September 11, stems from a mismatch in Input Tax Credit (ITC) for the financial year 2017-18.

GST Dispute Details

The controversy centers around a discrepancy between the ITC availed in GSTR-3B and the ITC available in GSTR-2A for FY 2017-18. Initially, the GST Authority had demanded a GST amount of INR 3.72 crores, along with an equivalent penalty of INR 3.72 crores, plus applicable interest.

Company's Response

KPIL maintains a strong stance on its defense, asserting that the order was issued without due consideration of the company's reply and documentary evidence. In response to this unfavorable ruling, the company has announced its intention to file a further appeal to a higher appellate authority within the prescribed timelines.

Financial Impact

Despite the substantial sum involved, KPIL has previously stated that the tax and penalty do not have a significant impact on its operations. This assertion suggests that the company is well-positioned to manage the financial implications of the dispute while pursuing legal remedies.

Broader Tax Challenges

The GST dispute is not the only tax-related challenge KPIL is currently navigating. According to the LODR data, the company has been dealing with income tax reassessments for the assessment years 2013-14 to 2020-21, following a search conducted in August 2023. While KPIL has received favorable outcomes in some instances, including a reduction of a INR 95.83 crore demand to nil for AY 2016-17, the company continues to address various tax matters through appeals and rectification applications.

Looking Ahead

As Kalpataru Projects International Limited prepares to contest the GST penalty at a higher appellate level, the company's ability to manage these regulatory challenges will be closely watched by investors and industry observers. The outcome of this appeal, along with the resolution of other ongoing tax disputes, could have implications for the company's financial statements and operational strategies in the coming quarters.

KPIL's proactive approach in addressing these tax issues, coupled with its assertion of strong grounds for defense, demonstrates the company's commitment to resolving regulatory matters while maintaining its focus on core business operations.

Kalpataru Projects International Limited (KPIL), a leading EPC player in the power transmission and distribution (T&D) and civil infrastructure sector, has announced securing new orders totaling ₹2,720.00 crores. These orders span across the company's core business segments, including power transmission & distribution and buildings & factories sectors.

Order Details

The new orders, as disclosed in a press release by the company, include projects in the following areas:

1. Power Transmission & Distribution (T&D) in India and overseas markets
2. Buildings and Factories (B&F) business in India

Management Commentary

Manish Mohnot, MD & CEO of KPIL, expressed enthusiasm about the company's recent achievements, stating, "We are delighted with the strong ordering momentum in our T&D and B&F business. It includes significant orders in the domestic T&D market, which expands our presence in the India T&D business. We are also enthused by the repeat orders from select private real estate developers, which has further strengthened our order book in the B&F business."

Impact on Order Book

The newly secured projects have significantly bolstered KPIL's order intake for the current fiscal year. Mohnot added, "With these orders, our order intake till date has reached ~₹12,620.00 Crores, which will meaningfully contribute to future growth."

Company Overview

Kalpataru Projects International Limited is a diversified EPC company with a strong presence in various infrastructure sectors. The company's expertise spans across:

• Power Transmission & Distribution
• Buildings & Factories
• Water Supply & Irrigation
• Railways
• Oil & Gas Pipelines
• Urban Mobility (Flyovers & Metro Rail)
• Highways
• Airports

KPIL has established a global footprint, currently executing projects in over 30 countries and maintaining a presence in 75 countries worldwide. The company is known for its strong organizational capabilities, superior technical know-how, and adherence to best-in-class sustainability standards.

The recent order wins underscore KPIL's continued growth trajectory and its ability to secure significant projects across its diverse business segments. As the company expands its order book, it positions itself for sustained growth in the infrastructure and EPC sectors.