TeamLease Services has announced that it has received an Order-in-Appeal from the Commissioner of CGST & Central Excise regarding a tax investigation. The order upholds a penalty of approximately ₹32.29 crore related to manpower services rendered between July 2017 and July 2022. The company maintains that the order suffers from significant legal infirmities and plans to challenge the decision in the Karnataka High Court. Currently, there is no material impact on operations.
Overview of Tax Order
The company received an Order-in-Appeal dated January 30, 2026, which concluded proceedings initiated by the Directorate General of GST Intelligence. The authorities have alleged that the company issued invoices without the underlying supply of manpower services for a period covering five years. The tax authority has imposed a penalty under the CGST Act, 2017.
Company Stance and Defense
TeamLease asserts that it has fully complied with all statutory requirements, including the issuance of valid GST invoices, processing of salary payments with necessary deductions, and the timely discharge of GST. The company stated that these transactions were appropriately reflected in its financial statements. Management believes the order is flawed due to jurisdictional issues and a violation of natural justice, including the failure to consider key material evidence.
Financial and Legal Implications
The penalty amount is approximately ₹32.29 crore. The company has confirmed that no additional tax demand has been raised at this stage and there is no material impact on its current operations. This potential liability has been disclosed under Note 46(f) of the company’s standalone financial statements for FY25. To resolve the matter, TeamLease is preparing to file a writ petition before the Hon’ble High Court of Karnataka to challenge the order and seek a stay against recovery proceedings.
Source: BSE
