United Breweries Ltd ( UBL ) reported on April 5 that it has been served with a tax demand totaling ₹263.72 crore by the Maharashtra State Goods & Service Tax ( GST ) Department. This demand arises from an order issued under Section 9(2) of the Central Sales Tax Act 1956, imposing additional tax, interest, and penalties for the fiscal year 2020.
The breakdown of the demand includes an additional tax of ₹119.82 crore, interest of ₹115.03 crore, and a penalty of ₹28.86 crore, totaling ₹263.72 crore. This order mainly concerns the imposition of 60% central sales tax ( CST ) on debit notes issued by UBL on behalf of various State Beverage Corporations for the reimbursement of state excise duties paid. The affected corporations include Telangana State Beverage Corporation ( TSBCL ), Karnataka State Beverage Corporation ( KSBCL ), and Andhra Pradesh State Beverage Corporation ( APBCL ).
UBL clarified that the demand order also relates to the non-submission of declaration forms in C & F for concessional tax rates. Despite this significant tax demand, the company expressed confidence in its position, stating that it has a strong case to present before the relevant appellate authority and does not anticipate any substantial financial impact except for a minimal statutory pre-deposit required upon appeal admission.
This situation is not unfamiliar to UBL, as it previously encountered a similar scenario in fiscal year 2019, when a demand of ₹275 crore was raised. However, the company successfully challenged this demand and obtained a substantially reduced order of ₹7 crore.
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