Bharat Heavy Electricals Limited (BHEL) has received an order from the GST authorities in Karnataka regarding tax demands for the period between FY 2019-20 and FY 2022-23. While the original demand totaled Rs. 65.75 crore, the adjudicating authority has dropped the majority of this amount. The company intends to contest the remaining balance of Rs. 10.92 crore plus penalties and interest, maintaining that the case is strong on its merits.
Details of the Tax Order
BHEL has received an ‘Order in Original’ from the Joint Commissioner of Central Tax, Bengaluru West, dated March 31, 2026. The order pertains to tax assessments spanning four financial years, from 2019-20 to 2022-23. Out of the initial demand of Rs. 65.75 crore previously reported in September 2025, the authorities have reduced the liability by Rs. 54.83 crore.
Impact and Company Stance
The remaining outstanding demand stands at Rs. 10.92 crore, accompanied by a penalty of Rs. 10.80 crore and applicable interest. The disputes leading to these demands primarily relate to classification issues, liability write-backs, and input tax credit claims. The company has clarified that there is no expected negative financial implication, as it views the demand as not tenable.
Next Steps
Bharat Heavy Electricals Limited is currently preparing to file an appeal before the relevant Appellate Authorities. The company remains confident in the strength of its case on merit and intends to contest the remaining balance and associated penalties within the prescribed legal timelines.
Source: BSE
