Whalesbook
KEC International has received an order from the Gujarat GST Authority on March 24, 2026, demanding ₹13.92 lakh in tax and an identical ₹13.92 lakh penalty, totaling ₹27.83 lakh. The tax demand stems from the alleged disallowance of input tax credit for the 2019-20 financial year.
The infrastructure company is reviewing the order and plans to contest it through legal channels. KEC International has stated it does not anticipate any significant financial impact on its operations as a result of this demand.
While the ₹27.83 lakh amount is not material for KEC International's scale, the order is part of a pattern of such demands from various state GST authorities. This recurring scrutiny highlights ongoing interpretations of tax compliance rules across different jurisdictions. This is a common challenge in the infrastructure EPC sector, where companies like Kalpataru Projects International, IRB Infrastructure Developers, and Larsen & Toubro also navigate complex tax regulations. The company also faces administrative and legal costs for contesting these orders, though it has indicated these are not substantial.
This Gujarat order follows similar tax demands KEC International has faced previously. In December 2025, the company disclosed a GST order from Rajasthan for ₹26.64 lakh in tax and penalty for FY 2018-19. Earlier, in August 2024, Uttar Pradesh authorities imposed a ₹14.10 lakh penalty over an address mismatch on a tax invoice. Rajasthan issued another order in December 2025 involving a ₹99.72 lakh tax demand and penalty for alleged short GST payments.
Across these various tax disputes, KEC International has consistently maintained its approach: reviewing each order, pursuing legal challenges, and asserting that the outcomes are unlikely to cause material financial harm to the business.
To put the current Gujarat demand into perspective, KEC International reported revenues of ₹13,114 crore in FY24. The ₹27.83 lakh tax and penalty represent approximately 0.02% of this annual revenue.
Shareholders will be monitoring updates on KEC International's legal proceedings challenging the Gujarat GST demand. Confirmation of no material financial impact will be key, alongside any further tax-related orders the company may receive.