Akzo Nobel India Limited, a leading name in the manufacturing and chemical sector, has successfully resolved its ongoing litigation with the Odisha GST Department. The matter involved a demand order related to the disallowance of input tax credit (ITC) under the CGST/SGST Act, 2017, for the period between July 2017 and March 2018.

Background of the Litigation

The initial demand order, issued on 29th December 2023, included:

• Tax: Rs. 53,24,926/-
• Interest: Rs. 54,58,805/-
• Penalty: Rs. 5,39,219/-

This culminated in a total liability of Rs. 1,13,22,950/-.

The issue arose when the Odisha GST Department disallowed ITC, alleging non-compliance under Section 73 of the CGST/SGST Act, 2017. Akzo Nobel India, maintaining its adherence to tax regulations, contested this demand by filing an appeal with supporting documentation within the stipulated time.

Recent Development

On 26th November 2024, the Additional Commissioner of Appeals of the Odisha GST Department reviewed the submissions and upheld the company's appeal. As a result:

• The tax demand was annulled.
• The interest and penalty amounts were also dropped.

The company received the official appeal order on 27th November 2024, confirming the resolution.

Implications for Akzo Nobel India

1. No Financial Impact:
   The appeal order ensures no financial liability for the company, with the demand amount now reduced to Nil.

2. Enhanced Compliance Reputation:
   This decision highlights Akzo Nobel India’s strong compliance practices and meticulous record-keeping, which played a key role in securing a favorable outcome.

Broader Impact

The resolution of this case sets a precedent for other organizations facing similar disputes regarding ITC disallowance. It also emphasizes the importance of prompt appeals and thorough documentation to challenge unfavorable tax orders.

Conclusion

This development is a significant win for Akzo Nobel India, allowing the company to maintain its financial stability and focus on its core operations without the burden of disputed tax liabilities. It further underscores the company’s commitment to regulatory compliance and transparent operations.

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