Cummins India has been served two separate orders from the Additional Commissioner CGST, Pune, resulting in aggregate tax demands and penalties totaling approximately ₹12.45 crore for FY 2019-20 to FY 2021-22. The issues involve the alleged incorrect reversal of Input Tax Credit (ITC) against credit notes and wrong classification of goods sold. The company plans to file an appeal against both assessments, asserting that the levies will have no material impact on its financials or operations.
Notification of Adverse Tax Orders
Cummins India Limited has formally informed the stock exchanges that it has received two distinct orders from the Additional Commissioner CGST, Pune-II Commissionerate, pertaining to financial years 2019-20, 2020-21, and 2021-22.
Order Details: ITC Reversal Issue
The first order (Order A) levies a significant tax demand and an equivalent penalty totaling Rs. 43,79,73,947. This assessment is based on the allegation that the company improperly reduced its output GST liability through Credit notes issued to customers without ensuring the corresponding reversal of Input Tax Credit (ITC), as required under the relevant Central and Integrated Goods and Services Tax Acts.
Order Details: Wrong Classification Issue
The second order (Order B) levies a combined tax demand and penalty of Rs. 18,51,57,200. This demand stems from allegations regarding the wrong classification of goods sold, which allegedly led to a short payment of GST and resulted in a demand for differential tax for the disputed period.
Appeal Plans and Financial Impact
The company has confirmed its intention to file an appeal against both adverse orders with the appropriate higher Authority. Furthermore, the management explicitly stated that the penalties levied in both cases are expected to have neither any material impact on the financials of the Company nor any impact on operational or other activity of the Company.
Timeline of Receipt
The orders, dated March 25, 2026, were officially received by the company on March 26, 2026.
Source: BSE
