- Reliance Industries faces a significant ₹4.88 lakh fine from the Jamnagar Tax Department due to erroneous GST credit refund claims.
- The company intends to appeal the decision, citing the non-retrospective application of amended tax regulations for the relevant period.
In a recent development, Reliance Industries finds itself in hot water as the Deputy Commissioner of State Tax, Jamnagar, has imposed a hefty fine of ₹4.88 lakh on the company. The penalty was levied under section 73 of the Goods and Service Act, 2017, and this was made public through an official exchange filing by the company.
Wrongful GST Credit Refund Claims
The substantial fine arises from Reliance Industries’ wrongful claim for the refund of unutilized input tax credits of GST. These claims spanned the period from April 2020 to October 2020, calculated based on the CIF value of exported goods. However, the tax department has decided to restrict the refund to the FOB value of the exports, leading to this financial setback for the company.
Appeal Against the Order
In response to the tax department’s decision, Reliance Industries has expressed its intention to challenge the order. The company argues that the amended law should not be applied retrospectively, asserting that the new regulations were not in force during the period in question.
Financial Ramifications
The adverse impact of this order on Reliance Industries’ finances is primarily in the form of the penalty imposed. While the exact extent of this financial setback is yet to be determined, it adds to the company’s regulatory and financial challenges.
Notification and Stock Performance
Reliance Industries received the official order via a system-generated email on October 7, 2023. As news of the penalty emerged, the company’s stock faced fluctuations. On Tuesday morning at 11:40 am IST, Reliance Industries’ shares were trading at Rs 2,306.80.
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