Whalesbook Corporate News
UltraTech Cement Limited has received a Goods and Services Tax (GST) order from Kerala authorities imposing a total demand of ₹51.48 lakh, comprising tax and an equal penalty. The demand pertains to alleged irregular availment of Input Tax Credit (ITC) for the fiscal years FY2019-20 through FY2022-23. The company has stated its intention to contest this order, expressing confidence that it will not have a material financial impact on its operations or overall financial standing.
While the amount is relatively small for a company of UltraTech's scale, such GST disputes concerning Input Tax Credit are common within India's tax system. The company's proactive stance and belief in no material impact suggest strong internal compliance measures or a conviction in achieving a favorable outcome.
UltraTech Cement, part of the Aditya Birla Group and India's largest cement manufacturer, has encountered multiple GST demand orders previously. In December 2025, it received a notice for ₹782.2 crore related to alleged short GST payments and improper ITC use for fiscal years 2018-19 to 2022-23. Earlier, in January 2026, Tamil Nadu authorities issued orders totaling ₹15.26 crore for alleged excess ITC claims during FY2020-21 and FY2022-23. Prior disputes also include a ₹1.14 crore GST demand in November 2023 for differential GST on mined limestone royalty and orders worth ₹72.06 lakh in January 2024 for ineligible ITC issues.
Following this latest order, investors will likely increase their monitoring of the company's tax compliance and litigation status. UltraTech intends to initiate legal proceedings to challenge the GST order, which may incur legal expenses and management focus, reinforcing its strategy of contesting demands it deems unjustified. The primary risk lies in the potential for continued legal costs and the uncertainty surrounding the resolution, even if no significant financial impact is anticipated.
As a market leader with a market capitalization of approximately ₹339,011 crore as of March 2025, UltraTech Cement operates within a complex tax compliance environment. Its peers, including Dalmia Bharat, Shree Cement, and ACC Ltd, face similar tax dynamics. While specific ITC disputes for these competitors are not detailed, the frequency of such demands on UltraTech highlights industry-wide challenges in tax compliance for major cement players.
The company will now proceed with legal challenges against the Kerala GST order. Investors and analysts will track updates on these proceedings, any further communication from tax authorities, and management's commentary on tax litigation during future earnings calls.