Cummins India has been served an order by the Additional Commissioner CGST, Pune, demanding tax and imposing a significant penalty totaling approximately ₹105.11 crore. This order pertains to alleged GST liabilities for financial years 2019-20, 2020-21, and 2021-22, stemming from the classification of lease agreements. The company confirms it intends to file an appeal against the order, stating the financial impact on operations is expected to be negligible.
GST Order Received by Cummins India
Cummins India Limited announced via a regulatory filing that it has received an order from the Additional Commissioner CGST, Pune-II Commissionerate. The order, dated March 28, 2026, levies a substantial demand related to Goods and Services Tax (GST) for the financial years spanning 2019-20, 2020-21, and 2021-22.
Breakdown of Financial Demands
The key details of the demand and penalty are as follows:
- Tax Demand: Rs. 52,55,51,043
- Penalty Imposed: Rs. 52,55,76,043
The total liability directed by the tax authority is therefore approximately Rs. 105.11 crore.
Basis of Allegation and Company Response
The authorities issued this demand based on the allegation that the Company treated its leave and license agreements as finance lease arrangements. This reclassification implies a transfer of proprietary interest in the leased property, leading to the levied output GST liability under Section 74 of the Central Goods and Services Tax Act.
In response to the order received on March 28, 2026, the Company has affirmed its intention to challenge the ruling. Further, the filing confirms that the Company will be filing an appeal in this regard with the appropriate Authority.
Impact Assessment
As per the required disclosure details, the management has assessed the potential consequence of this specific order. Cummins India has stated clearly that the penalty levied has neither any material impact on the financials of the Company nor has any impact on operational or other activity of the Company.
Public Disclosure Compliance
This intimation is being made pursuant to the requirements under the Listing Regulations. The details regarding the authority, nature of the order, and impact assessment have been provided in Annexure A of the communication. The notification has also been uploaded to the Company’s official website, www.cumminsindia.com, for public record.
Source: BSE
