Shriram Finance Receives Rs 46.91 Lakh GST Penalty from Tamil Nadu Tax Authority
Shriram Finance Limited received a penalty order of Rs 46,91,115 from Commercial Tax Officer, Chennai South for FY 2022-23, relating to GST issues of erstwhile Shriram City Union Finance Limited. The penalty involves disallowance of input tax credit and credit note issues, with total tax demand also at Rs 46,91,115. The company states no material impact on operations while awaiting tax consultant opinion on the matter.
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Shriram Finance Limited has received a penalty order of Rs 46,91,115 from the Commercial Tax Officer, Chennai South, Tamil Nadu, for the financial year 2022-2023. The company disclosed this development through a regulatory filing dated February 1, 2026, pursuant to Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.
Penalty Details and Legal Framework
The penalty order, dated January 31, 2026, has been imposed under Section 74 of the Central Goods and Service Tax Act, 2017, read with the Tamil Nadu Goods and Service Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017. The penalty relates to operations of erstwhile Shriram City Union Finance Limited, which was amalgamated with Shriram Finance Limited effective April 1, 2022.
| Parameter: | Details |
|---|---|
| Penalty Amount: | Rs 46,91,115 |
| Tax Demand: | Rs 46,91,115 |
| Financial Year: | 2022-2023 |
| Order Date: | January 31, 2026 |
| Receipt Date: | January 31, 2026 |
Nature of Violations
The demand for FY 2022-23 has arisen due to specific GST-related issues:
- Disallowance of input tax credit taken on payment of Reverse Charge Mechanism (RCM)
- Issues related to credit note issued
The total tax demand amounts to Rs 46,91,115, with an equivalent penalty of Rs 46,91,115 being levied by the tax authority.
Company's Response and Impact Assessment
Shriram Finance Limited has stated that there is no material impact on the financial, operational, or other activities of the company. However, considering the quantum of the amount involved and out of commercial prudence, the company is awaiting an opinion from its tax consultant regarding the Tamil Nadu state demand orders with reference number ZD330126226973F dated January 31, 2026.
Regulatory Compliance
The disclosure has been made in accordance with sub-para 20(b) of Para A of Part A of Schedule III to Regulation 30 of the Listing Regulations, read with SEBI Master Circular No.: HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026. The company has fulfilled its obligation to inform both BSE Limited and National Stock Exchange of India Limited about this development.
The penalty order represents a regulatory matter stemming from the company's amalgamation activities and highlights the ongoing compliance requirements in the GST framework for financial services companies.
Historical Stock Returns for Shriram Finance
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.20% | -0.59% | +1.86% | +57.65% | +85.32% | +274.47% |
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