Dalmia Bharat Limited (DALBHARAT), through its wholly owned subsidiary Dalmia Cement (Bharat) Limited (DCBL), has disclosed the receipt of two GST demand orders issued under Section 74 of the Central Goods and Services Tax Act, 2017. The orders, received on December 3, 2024, come from the Assistant Commissioner, Central Tax and Central Excise, Belagavi Rural Division, Karnataka.

The demand pertains to input tax credit (ITC) claims under the Reverse Charge Mechanism and other ITC-related disputes for the financial years 2017-18, 2018-19, and 2019-20.

Breakdown of the Orders

1. Order 1:

   • Tax Demand: ₹3.09 Lakhs
   • Interest and Penalty: ₹3.09 Lakhs

2. Order 2:

   • Tax Demand: ₹7.36 Lakhs
   • Interest and Penalty: ₹12.71 Lakhs

Total Tax Liability: ₹26.25 Lakhs (including interest and penalties).

Nature of Alleged Violations

The orders raise issues related to:

1. Reverse Charge Mechanism under GST for input tax credit.
2. Disputes regarding input tax credit claimed by DCBL for the specified years.

While the Assistant Commissioner confirmed these demands, Dalmia Cement strongly believes it has a merit-based case and has stated its intention to appeal the orders before the Commissioner (Appeals) within prescribed timelines.

Financial and Operational Impact

The company has clarified that these orders do not impose a significant financial burden on its operations, with the liability being limited to the amounts stated.

Dalmia Cement’s proactive response underscores its commitment to compliance while ensuring its operations remain unaffected by such disputes.

Next Steps

1. Appeal Process: DCBL will file appeals before the Commissioner (Appeals), presenting its case against the orders.
2. Regulatory Compliance: The company has disclosed this development in adherence to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Conclusion

While the GST demand orders highlight a temporary regulatory challenge, Dalmia Cement (Bharat) Limited has demonstrated readiness to navigate the issue through proper appellate procedures. With no major financial impact anticipated, this situation is unlikely to disrupt the company's broader operational or strategic goals.

Dalmia Bharat continues to focus on compliance and transparency, ensuring minimal disruptions in its journey toward sustained growth.