LTIMindtree Gets Stay Order On Rs 88 Crore GST Demand
LTIMindtree successfully obtained a stay order from the Karnataka High Court, halting a Rs 88 crore GST demand, including penalties and interest.
LTIMindtree Ltd. on Tuesday secured a relief on GST demand of Rs 88 crore after the Karnataka High Court stayed the proceedings till the next date of hearing.
The company was slapped with a demand of Rs 44 crore, a penalty of an equal amount, and interest as applicable for the period from April 2018 to January 2023 from the office of the Principal Commissioner of Central Tax, Bengaluru. The demand was raised in September.
The software maker filed a writ petition on Dec. 9 with the Karnataka High Court challenging the legality and validity of the order issued under section 74 of the CGST Act, 2017, and KGST Act, 2017. It involves denial of zero-rated supply, thereby leading to recovery of input tax credit refunds granted earlier.
"Based on preliminary assessment, prevailing law, and advice of counsel, the company is hopeful of an ultimate favourable resolution and does not reasonably expect the same to have any material financial impact on the company," LTIMindtree said.
In August, the Karnataka High Court had stayed a tax order worth Rs 378 crore issued by the Department of Goods and Services Tax, which accused LTIMindtree of not paying integrated GST on export turnover related to services provided to clients abroad.
Shares of LTIMindtree closed nearly 1% lower at Rs 6,672 apiece, ahead of the announcement, compared to a 1.32% decline in the benchmark NSE Nifty 50. The stock has gained 6.5% so far this year.
Out of 40 analysts tracking the company, 22 maintain a 'buy' rating, seven recommend a 'hold,' and 12 suggest a 'sell,' according to Bloomberg data. The average 12-month consensus price target of Rs 6,458 implies a downside of 3.6%.
