Quess Corp Receives ₹111.26 Crore Penalty Order from CGST Department

Bangalore, India – February 1, 2025 – Quess Corp Limited (NSE: QUESS, BSE: 539978) has announced that it received an Order-in-Original from the Office of the Commissioner of CGST, Palghar, Government of India. The order, dated January 30, 2025, and received by the company on February 1, 2025, imposes a penalty of ₹111.26 croreunder various provisions of the Central Goods and Services Tax (CGST) Act, 2017.

Regulatory Action and Allegations​

The CGST Department has cited violations spanning from FY 2017-18 to FY 2022-23, specifically:

1. Issuance of invoices without underlying supply of goods or services.
2. Alleged misuse of input tax credit (ITC) by passing it to insurance companies without actual manpower service supply, violating Section 16(2) of the CGST Act, Rule 36 of the CGST Rules, and relevant provisions of the SGST and IGST Acts.

Financial & Operational Impact​

Despite the substantial penalty, Quess Corp asserts that there is no material impact on its financials, operations, or other business activities. The company has also disputed the validity of the penalty, stating that:

• The order was passed without due consideration of the company’s representations and submissions.
• It plans to challenge the decision through appropriate legal forums.

Next Steps​

Quess Corp has confirmed that it is reviewing the order and preparing to contest it within the stipulated legal timeframe. The company also assured investors that it will continue to provide periodic updates on the matter.

Market Implications​

This development comes amid an environment of increased regulatory scrutiny in India’s corporate sector. While the company maintains that the penalty is non-material, investor sentiment may be affected, pending further legal proceedings.