Vedant Fashions Limited, a leading apparel brand known for Manyavar, has received an Order-In-Original from the Office of the Superintendent of Central Tax, Bengaluru. The order, dated February 14, 2025, was issued under Section 50 and 73 of the CGST Act, 2017, along with corresponding provisions of the KGST Act, 2017, and Section 20 of the IGST Act, 2017. It pertains to the financial year 2020-21 and demands recovery of ineligible Input Tax Credit (ITC) amounting to ₹17,53,784, along with interest and penalties.

The tax demand order was originally issued to Manyavar Creations Private Limited, which has since been amalgamated into Vedant Fashions Limited. The authorities have cited non-compliance with ITC provisions, leading to the demand for recovery. The breakup of the ITC amount includes ₹17,23,803 for IGST, ₹14,990 for CGST, and ₹14,990 for SGST. Additionally, a penalty of ₹1,92,380 has been imposed, with ₹1,72,380 for IGST, ₹10,000 for CGST, and ₹10,000 for SGST.

The company received the notice via email on February 14, 2025, at 5:59 PM (IST). As per regulatory requirements, Vedant Fashions has disclosed this development to the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial and Operational Impact
Vedant Fashions has assured stakeholders that apart from the specified tax recovery and penalties, there is no significant financial or operational impact on the company. The management is currently evaluating the order and will take appropriate action within the prescribed timeline.

This order highlights the strict enforcement of GST compliance in India, as tax authorities continue their scrutiny of corporate tax filings. Companies are advised to ensure proper documentation and compliance with input tax credit claims to avoid such liabilities.

The tax recovery case against Vedant Fashions is part of a broader regulatory framework ensuring that businesses adhere to the CGST, SGST, and IGST Acts. The company will review legal options, including possible appeals, based on the assessment of the order.

Investors and stakeholders in Vedant Fashions Limited, listed on both NSE and BSE, are closely monitoring the developments. The company's response and strategy in handling the GST demand notice will play a crucial role in shaping its financial position in the coming months.

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