Rithwik Facility Gets ₹23.30L GST Demand Order, Down from Initial ₹3.91 Cr Notice
Rithwik Facility Management Services has been issued a GST demand order of ₹23.30 lakhs by Tamil Nadu GST authorities for FY2021-22, significantly reduced from the initial show cause notice of ₹3.91 crores. The order identified excess and ineligible Input Tax Credit (ITC) claims. The company has resolved some issues through DRC-03 payments and is examining the order for potential legal recourse. They have 90 days to pay or appeal the demand.
*this image is generated using AI for illustrative purposes only.
Rithwik Facility Management Services has informed the Bombay Stock Exchange about receiving a GST demand order of ₹23.30 lakhs from Tamil Nadu GST authorities for the financial year 2021-22. The demand represents a significant reduction from the initial show cause notice of ₹3.91 crores issued on May 8, 2023.
GST Order Details
The order, dated December 22, 2023, was issued by the Assistant Commissioner (ST), Guindy Assessment Circle, following examination of the company's GST returns and related documents. The assessment identified multiple defects in the company's tax filings for FY2021-22.
| Parameter | Details |
|---|---|
| Initial Show Cause Notice | ₹3.91 crores |
| Final Demand Order | ₹23.30 lakhs |
| Assessment Period | FY2021-22 |
| Issuing Authority | Assistant Commissioner (ST), Guindy |
Key Defects Identified
The GST authorities identified several issues in the company's tax compliance:
Excess ITC Claims
The primary issue involved excess Input Tax Credit (ITC) claims totaling ₹4.79 lakhs (₹2.40 lakhs SGST + ₹2.40 lakhs CGST). However, the assessing authority found that ITC reversal was not warranted as the exempted income mentioned in GSTR-9 was interest income and reimbursement expenses.
Ineligible ITC Claims
The order highlighted claims for ineligible ITC under Section 17(5) of the SGST Act, 2017:
| Service/Commodity | SGST (₹) | CGST (₹) | Total (₹) |
|---|---|---|---|
| Construction Services | 95,336.00 | 95,336.00 | 1,90,672.00 |
| Insurance Services | 49,350.00 | 49,350.00 | 98,700.00 |
| Electrical Goods | 28,542.00 | 28,542.00 | 57,084.00 |
| Sanitary Goods | 3,693.00 | 3,693.00 | 7,386.00 |
| Auxiliary Insurance Services | 1,904.00 | 1,904.00 | 3,808.00 |
Company's Response and Resolutions
Rithwik Facility Management Services contested several allegations, providing detailed explanations for their ITC claims. The company argued that construction services related to elevator maintenance, insurance was mandatory for business purposes, and electrical goods were for repair and maintenance activities.
Successfully Resolved Issues
The company has already resolved multiple components through DRC-03 payments:
- Counterparty Tax Issues: Paid ₹14,140 for ITC claims from non-compliant dealers
- Interest on Late Reporting: Settled interest liability of ₹34 for belated invoice reporting
- Late Fee: Cleared GSTR-1 late filing fees
Final Assessment
The revenue abstract shows the total tax payable breakdown:
| Component | SGST (₹) | CGST (₹) | Total (₹) |
|---|---|---|---|
| Tax Demand | 1,67,249.00 | 1,67,249.00 | 3,34,498.00 |
| Penalty | 14,659.00 | 14,659.00 | 29,318.00 |
| Final Demand | ₹23.30 lakhs |
Company's Next Steps
The company has 90 days from the order date to pay the demand amount. Rithwik Facility Management Services stated it is examining the order in detail and exploring appropriate legal recourse to contest the demand before competent authorities. An appeal against this order can be filed before the Deputy Commissioner (ST), GST Appeals, Chennai, within 90 days of receipt.
The company may be liable to pay interest from the order date until actual payment if the demand is not contested successfully. This development represents a regulatory compliance matter that the company is addressing through proper legal channels.
Historical Stock Returns for Rithwik Facility Management Services
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -100.00% | 0.0% | 0.0% | -4.76% | -8.34% | +265.57% |
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