Shivam Autotech Limited, a listed auto component manufacturing company, has informed the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) that it has received a Goods and Services Tax (GST) demand order totaling ₹1.23 crore from the Government of Karnataka’s Department of Commercial Taxes.

This disclosure, made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, highlights a tax action taken under Section 73 of the CGST Act and KGST Act, in conjunction with Section 20 of the IGST Act, 2017.

Breakdown of the Demand

The tax demand order, received on July 31, 2025, includes the following components:

• Tax Liability: ₹66,76,482

• Penalty: ₹6,67,648

• Interest: ₹50,40,835

The total quantum of the GST demand stands at ₹1,23,84,965.

The order arises from a verification exercise carried out by the Commercial Tax Officer (Vigilance)-43, Bengaluru, wherein Shivam Autotech was found to have claimed excess Input Tax Credit (ITC) during the financial year 2021-22, as per a review of filings made through GSTR-3B returns on the GST portal.

Company's Response and Assessment

In response to the order, Shivam Autotech has firmly stated that it believes it has a strong case on merit. The company explained that the issue seems to have emerged as a result of reconciliation discrepancies, rather than any fraudulent or deliberate tax evasion.

According to its official statement, "The Company will challenge the same based on strong merits by way of filing an appeal before the relevant authorities."

Furthermore, Shivam Autotech has clarified that the order does not pose any material impact on its:

• Financial operations

• Ongoing business activities

• Operational continuity

The management believes this to be a procedural matter, which will be addressed through proper legal recourse.

Legal Basis of the Order

The GST demand falls under:

• Section 73 of CGST/KGST Act: Pertains to cases where tax has not been paid, or has been short paid, or Input Tax Credit has been wrongly availed or utilized, without any fraudulent intent.

• Section 20 of IGST Act: Relates to cross-utilization and distribution of tax responsibilities between center and state under the integrated GST structure.

Since this action is under Section 73 (non-fraudulent cases), it implies that the authorities believe the issue is compliance-related and not fraudulent, which may help the company in appealing the order.

Nature of the Violation

The exact violation cited in the order is:

"The ITC claimed by the taxpayer in GSTR-3B are verified and noticed that taxpayer has claimed excess ITC for the year 2021-22."

The detection of this excess claim is based on data verification conducted by the CTO (Vigilance), using backend analytics from the GST portal, which cross-checks supplier invoices, buyer credit, and return filing data.

Such reconciliations are a routine part of GST compliance audits, especially for companies operating across multiple states with complex vendor ecosystems, such as those in the auto component sector.

About Shivam Autotech Limited

Shivam Autotech Ltd is an established player in the automotive components sector, specializing in precision-engineered products for OEMs. It manufactures:

• Transmission gears and shafts

• Alternator components

• Starter motor parts

• Precision-engineered turned components

It serves major automotive OEMs and Tier 1 suppliers across India and overseas markets.

The company is listed on both NSE (Ticker: SHIVAMAUTO) and BSE (Scrip Code: 532776).

Its corporate office is located in Gurugram, Haryana, and it has a strong manufacturing base supported by advanced machining, quality systems, and supply chain integration.

Industry Context and Implications

India’s GST compliance landscape has seen a tightening of norms in recent years, with tax authorities increasing the use of AI and data analytics tools to spot irregularities in ITC claims.

Many companies across sectors have faced similar notices and orders. However, a large number of them have successfully contested such actions through proper reconciliation documentation and appeals.

In this case, Shivam Autotech’s response reflects confidence in its documentation and legal position.

From an investor perspective, since the company has stated that there is no material financial or operational impact, the issue is likely to be seen as non-disruptive unless further adverse developments arise.

Next Steps for the Company

As of now, Shivam Autotech plans to:

• File an appeal with the designated appellate authority under the GST Act.

• Present reconciliation data to justify ITC claims made in FY 2021-22.

• Continue business operations without disruption while the matter is under adjudication.

The market will watch closely for:

• The timeline of the appeal process.

• Whether the tax department considers any interim relief.

• The final verdict from appellate or judicial authorities.

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