Mumbai, February 3, 2025 – Everest Kanto Cylinder Limited (EKC) has received an order from the Office of the Commissioner of CGST & C. Ex., Palghar, demanding a differential GST liability of ₹126.72 crore (10%) under Section 74(1) of the Maharashtra Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Act, 2017, along with applicable interest and penalty.
Key Details of the Order
Issuing Authority: Additional Commissioner, CGST & C. Ex., Palghar.
Order Date: January 27, 2025.
Received by EKC: February 1, 2025.
Tax Period: July 2017 – March 2023.
The dispute centers around the classification of CNG cylinders supplied by EKC. The GST Department asserts that the company incorrectly classified cylinders under HSN Code 7311, which attracts 18% GST, instead of HSN Code 8708, applicable to motor vehicle parts taxed at 28%.
Financial Impact
EKC has been directed to deposit 10% of the differential tax liability under protest while filing an appeal. The company asserts that this issue stems from a difference in interpretation of the GST statute and could affect the broader automobile components industry.
Company's Response
EKC maintains that its classification was based on prevailing legal interpretations and advice from tax counsel. The company plans to challenge the order by filing an appeal under the GST Act.
Next Steps
EKC will file an appeal challenging the demand, interest, and penalty.
The case is expected to set a precedent for similar classifications in the industry.
Investors are advised to monitor developments closely, as the appeal outcome could significantly impact EKC’s financials and compliance requirements.