Lakshmi Infrastructure Cement (LIC) has received a Goods and Services Tax (GST) demand notice from the Central Goods and Services Tax (CGST) Ahmedabad commissionerate for Rs 101.95 crore. The notice is based on a preliminary audit conducted by the tax authority, which alleged that LIC had not paid the correct GST amount for the period from July 2017 to March 2019.
The notice stated that LIC had paid GST at the rate of 18% on cement and related products, instead of the actual rate of 28%. This discrepancy was calculated to result in a GST loss of Rs 101.95 crore to the government. The CGST commissionerate has demanded that LIC pay the differential GST amount within 30 days of receiving the notice.
LIC has reportedly stated that it is willing to pay the GST amount if the tax authority provides clarification on the notice and the discrepancies highlighted. The company has also claimed that it had followed the instructions and guidance provided by the GST authorities at the time of paying the taxes.
This is not the first instance of LIC receiving a GST notice. Earlier, the company had received notices for alleged non-payment of GST for the period from July 2017 to September 2017. LIC had contested these notices, arguing that it had paid the correct amount of GST and that the notice was based on incorrect calculations.
The latest notice from the CGST commissionerate has put a cloud of uncertainty over LIC’s financials. The company has been struggling with debt and had received a corporate debt restructuring (CDR) package in 2016 to restructure its debt. A significant payment like the one demanded by the tax authority could have a material impact on LIC’s financial position and its ability to service its debt.
The issue highlights the complexities and challenges associated with the GST regime, which has been plagued by technical issues and lack of clarity on certain aspects of the law.