Escorts Kubota has announced that the State Tax Officer, Chennai, has dropped the tax demand of ₹43,25,58,315 along with interest and penalty for the financial year 2018-19. The company had contested the GST department’s allegations and filed written objections. The original issue involved a dispute over the classification of agricultural tractors and the calculation of applicable taxes.
Favorable Resolution of GST Dispute
Escorts Kubota has received a favorable order regarding a previously disclosed GST matter. The State Tax Officer in Chennai has dropped the tax demand initially proposed for the financial year 2018-19. This resolves a significant uncertainty and removes a potential financial burden for the company.
Background of the Issue
The dispute originated from a Show Cause Notice (SCN) issued by the GST authorities, proposing a tax demand along with interest and penalty. Escorts Kubota contested the allegations, arguing that the GST department had incorrectly classified agricultural tractors and miscalculated the applicable taxes. The company maintained that the financial impact would be immaterial due to these classification errors.
Order Details and Impact
Following written objections filed by Escorts Kubota, the State Tax Officer, Mandaveli Assessment Circle, Chennai, issued an order on December 29, 2025, dropping the tax demand of ₹43,25,58,315, which included interest and penalty. This development concludes the matter for the financial year 2018-19 and avoids any potential adverse financial impact on the company.
Source: BSE
