Mumbai, February 3, 2025 – Mangalam Cement Ltd. (NSE: MANGLMCEM, BSE: 502157), a part of the BK Birla Group, has disclosed regulatory developments related to tax and goods and services tax (GST) matters. The company has received orders from the Assistant Commissioner, Central Goods & Services Tax Department, Kota, and the Income Tax Appellate Tribunal, Jaipur Bench "B", both of which have financial implications.
GST Order Details
The Assistant Commissioner, Central GST Department, Kota, has issued Order-In-Original No. 03/GST/Kota Rural/2025, dated January 16, 2025, which was received by the company on February 3, 2025. The key details of the order are:| Particulars | Details |
|---|---|
| Authority | Assistant Commissioner, Central GST Department, Kota, Rajasthan |
| Penalty & Demand | ₹1,73,65,200 imposed as a penalty, plus an equivalent amount as wrongly availed Input Tax Credit (ITC), totaling ₹3,47,30,400 |
| Violation Alleged | Suppression of material facts regarding ITC usage, contravening CGST Act, 2017, read with IGST Act, 2017 |
| Financial Impact | ₹3.47 crore in liabilities |
| Company Response | Mangalam Cement does not agree with the order and will file an appeal under Section 107 of CGST Act, 2017, within three months from the order’s communication. |
Income Tax Appellate Tribunal Ruling
In a separate case, the Income Tax Appellate Tribunal, Jaipur Bench "B", ruled in favor of Mangalam Cement in an appeal against the Dispute Resolution Panel-1, New Delhi's order dated April 23, 2024, related to Assessment Year 2020-21.| Particulars | Details |
|---|---|
| Authority | Income Tax Appellate Tribunal, Jaipur Bench "B" |
| Nature of Case | Appeal against a ₹46.16 crore adjustment under Section 92CA(3) of the Income Tax Act, 1964, related to deduction under Section 80-IA |
| Ruling Date | January 15, 2025 (received by the company on February 3, 2025) |
| Financial Impact | The order impacts ₹16.13 crore, or 34.94% of the total adjustment |
| Company's Argument | The company claimed brought-forward losses, nullifying the need for the adjustment. Additionally, the modified return filed under Section 119(2)(b) was not considered by the AO. |
| Tribunal Decision | The Tribunal ruled in favor of Mangalam Cement, allowing the appeal for statistical purposes. |
Company Response and Market Implications
Mangalam Cement has stated that it will challenge the GST order through the appellate process and has acknowledged the positive ruling from the Income Tax Appellate Tribunal. The company will continue its legal efforts to resolve these matters.Investors and stakeholders will be watching how these regulatory developments impact Mangalam Cement's financials, with particular attention to cash flow adjustments due to potential tax liabilities.
Conclusion
Mangalam Cement Ltd. is navigating regulatory headwinds related to GST and income tax matters, with a potential ₹3.47 crore GST liability and an ITAT ruling in its favor reducing a ₹16.13 crore potential tax impact. The company’s decision to appeal the GST order reflects proactive legal strategy, while the ITAT ruling offers partial relief from past tax disputes.Investors are advised to monitor upcoming financial statements and regulatory updates for further clarity.