Rashtriya Chemicals and Fertilizers Limited (RCF), a Government of India undertaking, has disclosed that it received a Goods and Services Tax (GST) demand order amounting to ₹98,18,40,12 (₹98.18 crore) from the Assistant Commissioner, GST, Raipur. This demand relates to turnover adjustments under Section 15 at table 5(M) of GSTR-9C - Annual Return under the GST Act, 2017 for the financial year 2020-21.

The company has decided to appeal against this order and has formally notified the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) as per Regulation 30 of SEBI (LODR) Regulations, 2015.

Breakdown of the GST Demand Order

As per Annexure A of RCF’s stock exchange filing, the demand order issued on March 6, 2025, at 06:06 PM, includes the following components:

• Tax Demand: ₹54,82,37,12 (₹54.82 crore)
• Interest: ₹37,87,79,28 (₹37.87 crore)
• Penalty: ₹5,48,23,72 (₹5.48 crore)
• Total Demand: ₹98.18 crore

Nature of the Dispute

The dispute arises from adjustments made in RCF’s turnover under Section 15 of the GST Act, 2017. The Raipur GST authorities have alleged that RCF has committed a violation related to turnover adjustments in its annual return (GSTR-9C) for the 2020-21 financial year. However, RCF has stated that this will not have any material impact on its financials or operations and is preparing to challenge the demand through an appeal.

RCF’s Response & Next Steps

RCF has categorically denied any significant financial impact from the GST demand. The company has also confirmed that it is in the process of filing an appeal against the order.

Regulatory Compliance & SEBI Disclosure

As per SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, companies are required to disclose material litigation, tax demands, or regulatory actions that may impact their operations or financial health. RCF’s transparency in disclosing this demand order ensures that investors and stakeholders are kept informed of any legal proceedings.

Financial & Operational Impact

• No immediate financial burden: RCF has stated that the GST demand will not significantly impact its financials as the company will contest the order.
• No disruption to operations: The manufacturing and business activities of RCF remain unaffected by this GST demand.
• Future financial provisions: Depending on the outcome of the appeal, RCF may have to provision the amount in its financial statements.

What Happens Next?

1. RCF to File Appeal: The company will contest the GST demand before the appellate authority, seeking relief from the ₹98.18 crore liability.
2. Legal Review & Tribunal Hearing: If the appellate body does not rule in favor of RCF, the company may escalate the case to higher judicial authorities such as the GST Appellate Tribunal or High Court.
3. Possible Outcome Scenarios:
   • Full waiver of demand if RCF successfully defends its case.
   • Partial relief, where some components (e.g., penalty or interest) might be waived or reduced.
   • Full payment requirement if the appeal is rejected.

Industry Context: GST Disputes in India

The GST Act, 2017, has led to multiple tax disputes due to varying interpretations of turnover adjustments, input tax credits, and tax applicability. Several large corporations and public sector undertakings (PSUs) have faced similar GST demands.

Recent High-Profile GST Disputes:

• Coal India Limited (CIL): Faced ₹5,000+ crore GST demands in 2024, later settled through appeals.
• Oil & Natural Gas Corporation (ONGC): Challenged ₹1,200 crore GST demand related to royalty payments.
• Indian Railways Contractors: Multiple vendors faced ₹800 crore GST disputes over contract adjustments.

Conclusion

RCF’s ₹98.18 crore GST demand is part of ongoing tax compliance challenges faced by major corporations. The company’s decision to challenge the order through an appeal suggests confidence in its financial and legal position. Investors and stakeholders will closely monitor the appeal’s outcome, which could determine whether RCF gets relief or has to pay the demanded tax, interest, and penalties.