Chennai, February 28, 2025 – BGR Energy Systems Limited (NSE: BGRENERGY, BSE: 532930) announced a substantial reduction in its tax liability following a rectification order by the Assistant Commissioner of GST, Ponneri, Tiruvallur. The company's earlier tax demand of ₹445.18 crore, issued in August 2024 for the financial year 2019-2020, has now been revised downwards significantly to ₹35,80,494, inclusive of interest and penalty.
Key Highlights of the Rectification Order
| Particulars | Details |
|---|---|
| Original Demand Order | ₹445.18 crores |
| Revised Liability (Rectified) | ₹35.80 lakhs (inclusive of interest and penalty) |
| Net Reduction in Liability | ₹444.82 crores |
| Financial Year | 2019-2020 |
| Tax Period | April 2019 - March 2020 |
| Date of Rectification Order | February 27, 2025 |
Nature of Tax Issue & Rectification
The rectification follows the previous order citing discrepancies related to turnover differences, non-submission of SEZ records, incomplete GSTR 9C reconciliation statements, unresolved RCM liabilities, blocked credits under section 17(5), and non-reversed Input Tax Credit (ITC).This rectification significantly lowers BGR Energy Systems’ contingent liabilities, thereby positively impacting the company's financial position.
Corporate and Regulatory Context
The initial demand was part of a broader regulatory enforcement action initiated under Section 73 of the TN GST Act 2017/CGST Act. The substantial downward revision reflects favorably on the company's compliance standing, relieving considerable contingent financial obligations.Management Commentary
Confirming the update, S. Sundar, Company Secretary and Compliance Officer, stated, “This rectification is a positive development, substantially reducing our contingent liabilities. It underlines the company's strong regulatory compliance efforts and significantly enhances our financial clarity.”Strategic Outlook & Investor Sentiment
The substantial reduction in tax liabilities enhances investor confidence, potentially improving liquidity and the company's attractiveness for future investments. It positions BGR Energy Systems favorably, enabling better allocation of financial resources towards strategic projects and growth initiatives.This disclosure underscores BGR Energy Systems Limited’s commitment to transparency and robust regulatory compliance, reflecting positively on its governance standards.