Welspun Sattanathapuram Nagapattinam Road Private Limited, a subsidiary of Welspun Enterprises, has received six show cause notices from the Tamil Nadu GST authorities. The notices, totaling ₹179.87 crore in tax and an equal amount in penalties, concern alleged turnover discrepancies and excess Input Tax Credit claims. The company maintains that its tax filings are accurate and believes the demands are without merit, foreseeing no material impact on its financial or operational activities.
Context of the Tax Notices
The subsidiary, Welspun Sattanathapuram Nagapattinam Road Private Limited (WSNRPL), received these notices on May 21, 2026. The dispute relates to the fiscal years 2020-21 through 2025-26. Tax authorities have alleged a mismatch between the turnover reported by the company in its GSTR-3B filings and the GSTR-7 statements filed by the project client.
Nature of the Dispute
The core of the issue stems from the client’s reporting of GST TDS. The project spans both Tamil Nadu and the Union Territory of Puducherry. The company asserts that the client inaccurately reported the total project turnover and GST TDS under the state of Tamil Nadu alone, failing to bifurcate the figures for the two distinct jurisdictions. Consequently, the tax authorities have proposed a tax liability of ₹179,87,33,835 and an equivalent penalty amount of ₹179,87,33,835.
Company Stance and Financial Impact
The company remains confident in its position, noting that it has properly discharged its tax obligations for services rendered in Tamil Nadu. Management highlighted that a similar issue had previously been addressed, with the authorities dropping the demand upon review. WSNRPL plans to submit a detailed reconciliation and reply to the authorities. The firm does not expect this litigation to have a material impact on its financial standing or ongoing business operations.
Source: BSE
