Vedanta Limited reported that its subsidiary, Bharat Aluminium Company Limited (BALCO), has been served with a Goods and Services Tax (GST) demand notice amounting to Rs 84 crore. The notice, issued by the "Office of the Joint Commissioner, Bilaspur," pertains to the fiscal year 2017-18 and is related to various interpretational issues under the provisions of the Central Goods and Services Tax Act, 2017.
The mining major disclosed in a regulatory filing that the total GST demand stands at Rs 84,70,09,977, and BALCO has been directed to pay a penalty of 10 percent of this amount, along with applicable interest. The company is currently assessing its options and evaluating the next course of action in response to the demand notice.
It is noteworthy that BALCO, once a government-owned entity, was acquired by Vedanta in 2001 when the Union Mines Ministry divested 51 percent of its stake. Despite the recent development, both BALCO and Vedanta have expressed confidence that the order will not have any substantial financial impact on the company.
In addition to the GST notice, recent reports indicated that the government was exploring options to further reduce its holding in BALCO by selling a portion of its remaining 49 percent stake. The company's key operations are centered around Chhattisgarh's Korba, with mines in Kawardha and Mainpat supplying high-grade Bauxite.
Financially, BALCO has experienced a downturn in its profits, as reported in the financial year ending March 31, 2023. The profit after tax for this period amounted to Rs 42 crore, a significant decrease compared to Rs 2,736 crore in the previous year. Similarly, the total comprehensive income stood at Rs 75 crore, down from Rs 2,720 crore in FY22. Despite these challenges, both BALCO and Vedanta remain optimistic about weathering the storm and mitigating any potential financial impact arising from the GST demand notice.
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