Asian Paints, a leading paints manufacturer, revealed on Monday that it has received a Goods and Services Tax (GST) demand notice of Rs 13.83 crore along with a penalty of Rs 1.38 crore from the Deputy Commissioner of State Tax, Chennai. The demand pertains to the financial year 2017-18 and centers around a mismatch on Input Tax Credit (ITC), as disclosed in a regulatory filing.
In response to the notice, Asian Paints stated,
"The company has a strong case based on merits and will be filing rectification and/or appeal against the said order within the prescribed timelines."
The paints giant emphasized that it has fulfilled all conditions for availing ITC and has discharged applicable taxes on its outward supplies. The order was issued under the relevant provisions of the Central Goods and Services Tax Act, 2017, and the corresponding provisions of the Tamil Nadu Goods and Services Tax Act, 2017.
The tax department's demands include "additional tax on outward supplies, disallowance on account of ITC mismatch between purchases reported by the supplier in GST return and credit claimed by the company, ITC of invoices pertaining to FY 2017-18 and claimed in FY 2018-19."
While Asian Paints acknowledges the penalty, the company reassures stakeholders that it will have "no material impact on the financial, operation, or other activities" of the organization, given its robust financial performance. For the fiscal year ending March 31, 2023, Asian Paints reported a revenue of Rs 30,078.40 crore.
The company's commitment to rectify the matter within prescribed timelines reflects its confidence in the strength of its case and compliance with tax regulations. This development serves as a reminder of the ongoing challenges businesses face in navigating the complexities of GST regulations and ensuring accurate ITC reporting.
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