Rithwik Facility Management Services Limited has informed the stock exchanges about receiving a substantial GST penalty of ₹4,62,82,054.00 from tax authorities. The penalty relates to output tax discrepancies identified for the financial year 2021-22.

Penalty Details and Authority

The penalty order was issued by the Assistant Commissioner, Guindy Assessment Circle, under Section 73 of the GST Act. The order was uploaded to the GST Portal on December 27, 2025, and the company received notification of the same.

Nature of Violation and Financial Impact

The penalty has been imposed on account of output tax discrepancies for the financial year 2021-22. The total financial impact on the company amounts to ₹4,62,82,054.00, which includes tax, interest, and penalty components.

The company has categorized the violation under "various GST issues" without providing specific details about the nature of the tax discrepancies that led to this substantial penalty.

Company's Response and Legal Recourse

Rithwik Facility Management Services has stated that it is examining the penalty order in detail. The company is actively exploring appropriate legal recourse to contest the penalty before competent authorities.

This indicates that the company does not accept the penalty as final and intends to challenge the order through proper legal channels available under the GST framework.

Disclosure Timeline

The company explained the delay in disclosure by citing that the order was hosted on Saturday, December 27, 2025, followed by weekend holidays and technical glitches on Monday, which prevented them from viewing the order until December 30, 2025.

Regulatory Compliance

The disclosure has been made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has provided all required details as specified under Para A of Part A of Schedule III of LODR Regulations, ensuring compliance with regulatory disclosure norms for material events that could impact the company's operations and financial position.

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.

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:

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:

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.