NELCO GST Appeal Dismissed, ₹2.04 Cr Demand Upheld

1 min read Updated on 22 Dec 2025, 06:40 PM

Reviewed by

Riya DScanX News Team

Overview

NELCO Limited's GST appeal has been dismissed by the Joint Commissioner, confirming a demand of ₹2.04 crores including penalties. The ruling pertains to GST liability based on reverse charge mechanism violations from July 1, 2017, to March 31, 2019. The order was issued under Section 107 of the Central Goods and Services Tax Act, 2017, upholding the earlier decision by the Deputy Commissioner of CGST & C. Ex.

*this image is generated using AI for illustrative purposes only.

NELCO Limited has received an adverse ruling from tax authorities, with the Joint Commissioner dismissing the company's GST appeal and confirming a demand of ₹2.04 crores including penalties. The order marks a significant setback for the telecommunications equipment company in its ongoing tax dispute.

Background of the GST Dispute

The current ruling stems from an earlier adjudicating order received from the Deputy Commissioner of CGST & C. Ex. The original demand pertains to GST liability based on reverse charge mechanism violations for the period from July 1, 2017, to March 31, 2019.

Details of the Appellate Order

The Joint Commissioner has issued an order under Section 107 of the Central Goods and Services Tax Act, 2017, confirming the demand raised by the Deputy Commissioner. The ruling effectively validates the tax department's position regarding NELCO's GST compliance during the specified period.

Parameter	Details
Total Demand	₹2.04 crores (including penalty)
Penalty Component	Not specified
Period Covered	July 1, 2017 to March 31, 2019
Legal Provision	Section 107, CGST Act 2017

Financial Implications

The company has disclosed that the expected financial implication amounts to ₹2.04 crores, including penalties. The exact breakdown of the penalty component is not specified in the provided information.

Company's Response and Next Steps

NELCO has not provided specific information about its response or next steps in light of this ruling. Companies in similar situations often consider pursuing further legal remedies or evaluating other options to address such orders.

Regulatory Compliance

The regulatory disclosure was likely made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency with stakeholders regarding this material development.

Historical Stock Returns for NELCO

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.03%	+1.26%	-12.34%	-31.67%	-44.59%	+283.84%

Read Next Article

CRISIL Revises Nelco's Rating Outlook to Stable, Reaffirms A Rating

2 min read Updated on 18 Nov 2025, 06:25 PM

Reviewed by

Naman SScanX News Team

Add as a preferred
source on Google

Overview

CRISIL Ratings has revised NELCO's long-term bank facilities outlook to 'Stable' from 'Positive', while reaffirming the 'CRISIL A' rating. The change is due to slower revenue growth in key segments. NELCO's consolidated operating income declined from Rs 321.00 crore to Rs 306.00 crore. The rating covers Rs 218.30 crore of bank facilities, with the short-term rating maintained at 'CRISIL A1'. CRISIL expects healthy revenue growth in the medium term, driven by recurring service business, government segment growth, and increased VSAT technology adoption. NELCO's financial profile remains healthy with a TOLANW ratio of 1.08 times and adjusted gearing of 0.42 times as of March 31.

*this image is generated using AI for illustrative purposes only.

CRISIL Ratings has revised its outlook on NELCO 's long-term bank facilities to 'Stable' from 'Positive' while reaffirming the 'CRISIL A' rating. This adjustment comes in response to slower-than-anticipated revenue growth in key segments, including government, maritime, and banking, financial services, and insurance (BFSI).

Revenue Performance

The revision follows a period of range-bound revenue over the last 2-3 fiscal years. NELCO's consolidated operating income saw a decline from Rs 321.00 crore to Rs 306.00 crore, reflecting the challenges faced by the company in its core business areas.

Rating Details

CRISIL's rating action covers Rs 218.30 crore of NELCO's bank facilities. The rating agency has maintained its short-term rating at 'CRISIL A1'. Here's a breakdown of the ratings:

Facility	Rating
Long Term Rating	CRISIL A/Stable (Outlook revised from 'Positive'; Rating Reaffirmed)
Short Term Rating	CRISIL A1 (Reaffirmed)

Factors Influencing the Rating

Despite the outlook revision, CRISIL's reaffirmation of the 'A' rating reflects NELCO's strong market position in the niche very small aperture terminal (VSAT) service industry. The company maintains a healthy revenue visibility over the next few fiscal years and has sustained a robust operational and financial risk profile.

CRISIL also factored in the support NELCO receives from the Tata group, which enhances its financial flexibility. As of September 30, the Tata group, through The Tata Power Company Ltd and its subsidiaries, held a 50.09% equity stake in NELCO.

Business Outlook

Looking ahead, CRISIL expects NELCO's revenue to grow at a healthy rate in the medium term. This growth is anticipated to be driven by:

The recurring nature of its service business
Increasing revenue from the government segment
Expected increase in bandwidth revenue
Growing adoption of VSAT technology

These factors are likely to support NELCO's market position and operating profitability on a sustained basis.

Financial Profile

While NELCO's operating profitability has moderated, its overall financial profile remains healthy. As of March 31, the company reported:

Financial Metric	Value
Total outside liabilities to adjusted networth (TOLANW) ratio	1.08 times
Adjusted gearing	0.42 times

CRISIL expects NELCO to utilize its operating cash accrual towards business requirements, which should support the sustenance of its healthy capital structure.