Indo Euro Indchem Ltd Addresses GST Demand Order Alleging Fraudulent ITC Availment
Indo Euro Indchem Ltd has provided a clarification regarding a significant tax dispute, detailing an order received from the Assistant Commissioner of Central GST & Central Excise in Mumbai. The company addressed an alleged violation concerning the fraudulent availment of Input Tax Credit (ITC) and announced its plans to challenge the demand before appellate authorities.The matter stems from an order passed on March 13, 2026, by the Office of the Assistant Commissioner of Central GST & Central Excise, Division-I, Mumbai Central Commissionerate. The order, issued under the CGST Act, 2017 and corresponding provisions under the Maharashtra SGST Act, 2017 and IGST Act 2017, alleges serious contraventions.
Details of the GST Allegations
According to the company's announcement, the authorities allege that Indo Euro Indchem Ltd fraudulently availed Input Tax Credit (ITC) of Rs. 10,69,040/- (Rupees Ten Lakh Sixty-Nine Thousand and Forty only). This alleged violation occurred pertaining to inward supplies supported by fake or bogus e-way bills, which the authorities contend was done in violation of Section 74(1) of the CGST Act, 2017.Further, the order demanded a penalty amounting to Rs. 62,70,852/- (Rupees Sixty-Two Lakh Seventy Thousand Eight Hundred and Fifty-Two only) under Section 122 of the CGST Act, 2017. The penalty was imposed by the authorities on the grounds of suppression of facts and the resultant availment of inadmissible ITC through the generation of fake invoices/e-way bills.
The key details of the action taken by the authority are presented below:
| Sr. No. | Particulars | Information |
|---|---|---|
| 1 | Name of the authority | Office of the Assistant Commissioner of Central GST & Central Excise, Division-I, Mumbai Central Commissionerate |
| 2 | Nature and details of the action(s) taken, initiated or order(s) passed | Order passed under CGST Act, 2017 corresponding section under Maharashtra SGST Act, 2017 and IGST Act 2017 |
| 3 | Date of receipt of direction or order | 13th March, 2026 |
| 4 | Details of the violation(s)/ contravention(s) committed or alleged | Allegation of fraudulently availing Input Tax Credit (ITC) amounting to Rs. 10,69,040/- pertaining to inward supplies supported by fake/bogus e-way bills, in violation of Section 74(1) of the CGST Act, 2017. Penalty demanded amounting to Rs. 62,70,852/- under Section 122 of the CGST Act, 2017. |
| 5 | Impact on financial, operation or other activities | The financial impact is a contingent liability to the Company. The company stated that it will be filing an appropriate response to the notice and will pursue appropriate legal remedies. There is no impact on operations and other activities of the Company due to the order. |
Company’s Strategy and Financial Impact
Indo Euro Indchem Ltd advised that the delay in the corporate announcement was due to an internal review process conducted by the Company’s Management and GST team. This review aimed to determine the prima facie substance and the amount involved, noting that the matter relates to the past.Based on the advice of its tax consultants, the company has decided to defend the matter before an appropriate or appellate authority. The company stated it will be filing an appropriate response to the GST Demand Order within the prescribed timelines. While the financial implication of the order is categorized as a contingent liability, the company assured that there will be no impact on its ongoing operations and other activities.
Stock Price Movement
Indo Euro Indchem Ltd settled on Thursday at ₹10.86, marking a 4.32% drop for the shares. The stock experienced significant movement throughout the day, falling from an intraday high of ₹11.50 toward its low of ₹10.55.Source:
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