TVS Supply Chain Solutions Limited (TVS SCS) has announced its intention to challenge a recent order from the Goods and Services Tax (GST) Department regarding an Input Tax Credit (ITC) claim of ₹4.90 crore. The company, which received the order from the Joint Commissioner, CGST & CX, Jamshedpur, maintains that the claim is not maintainable and expects no material impact on its operations or finances.

Details of the GST Order

According to a disclosure made by TVS SCS to the stock exchanges on August 25, 2025, the GST Department has alleged that the company availed excess GST credit amounting to ₹4,90,82,303 for the financial years 2018-19 to 2022-23. Consequently, the department has levied a penalty of ₹4,92,71,821.

Company's Response

TVS Supply Chain Solutions has stated that it plans to contest the order. The company's official statement reads, "The claim is not maintainable against the Company. There is no material impact on financial, operation or other activities of the Company due to the tax demanded vide above mentioned order."

Next Steps

Based on the advice of its tax consultants, TVS SCS has announced that it will be taking the following actions:

1. Filing an appropriate response to the GST Department's order
2. Taking suitable measures for legal/judicial remedy

Implications

While the GST Department's claim is substantial, TVS Supply Chain Solutions remains confident in its position. The company's assertion that there will be no material impact suggests that it is well-prepared to address this tax issue without significant disruption to its business operations.

Investors and stakeholders will likely be watching closely as this situation develops, particularly to see how it might affect the company's financial statements in the coming quarters. However, given the company's strong stance on the matter, it appears that TVS SCS is prepared for a potentially lengthy resolution process.

As this issue unfolds, it underscores the importance of robust tax compliance systems and the potential challenges companies may face in interpreting and applying complex tax regulations, especially in a relatively new tax regime like GST in India.

TVS Supply Chain Solutions Limited (TVSSCS) has reported a consolidated revenue of INR 2,592.00 crores for Q1, marking a 3.7% sequential growth and a 2.1% year-on-year increase. The company has also launched Project One, a significant restructuring initiative aimed at improving operational efficiency and profitability.

Financial Highlights

• Consolidated revenue: INR 2,592.00 crores (3.7% QoQ growth, 2.1% YoY growth)
• Adjusted EBITDA: INR 173.00 crores with a 6.7% margin
• Adjusted PBT (excluding share of profit from associates): INR 19.00 crores, up from INR 14.00 crores in the previous year's Q1

Project One Restructuring

TVSSCS has initiated Project One, a comprehensive restructuring program combining its Integrated Supply Chain Solutions (ISCS) and Integrated Final Mile (IFM) businesses in the UK and Europe under a single leadership. The program is expected to deliver:

• Annualized cost savings of INR 110.00-120.00 crores
• INR 50.00-60.00 crores in benefits starting to reflect in the future

As part of this restructuring, the company recognized one-time exceptional costs of INR 91.00 crores in Q1.

Segment Performance

1. ISCS Segment

• Revenue: INR 1,982.90 crores (2% QoQ growth, 4.1% YoY growth)
• Steady growth across regions

2. Global Freight Services (GFS) Segment

• Revenue: INR 609.40 crores (9.7% QoQ growth, 3.8% YoY decline)
• Impacted by continued pressure on freight rates and macroeconomic uncertainties

Strategic Investment in TVS ILP

TVSSCS realized significant value from its strategic investment in TVS Industrial and Logistics Park (TVS ILP). The company recorded INR 177.00 crores as its share of profit in Q1, following TVS ILP's transfer of approximately 11 million square feet of developed assets into an InVIT platform.

Business Development

• New business wins: INR 124.00 crores in Q1, representing about 5% of the previous year's Q1 revenue
• Order pipeline: Remains strong at INR 5,300.00 crores

Future Outlook

TVSSCS maintains its target of achieving:

• 4% PBT by Q4 FY27
• Mid-teens revenue growth

Ravi Viswanathan, Managing Director of TVSSCS, commented, "Q1 has been a strong start to the year, driven by disciplined execution. Project One will be one of the key levers in delivering our 4% PBT target by Q4 FY27, alongside the sustained turnaround of IFM and operational leverage across our other regions."

The company remains cautious about macroeconomic uncertainties and geopolitical factors but is confident in its ability to navigate volatility and capture growth opportunities with its diversified portfolio and disciplined cost management approach.