Axel Polymers Faces Rs 86.63 Crore Tax Demand from GST Authorities

Total Liability: Rs 86.63 Crore | Confirmed Penalty: Rs 55.06 Crore

Reader Takeaway: Axel Polymers faces a significant tax demand but plans to contest the order legally; operational stability remains intact.

What just happened

Axel Polymers Ltd has received an Order-in-Original from the Additional Commissioner, Central GST & Central Excise, Vadodara-II. The order demands a total of Rs 86.63 crore, comprising Rs 31.57 crore in confirmed input tax credit (ITC) demand and Rs 55.06 crore in penalties. The assessment covers the financial years 2021-22 through 2024-25.

Nature of Allegations

The tax authorities allege that the company availed of input tax credit without the physical receipt of goods. Furthermore, the authorities claim the company passed on input tax credit without the actual supply of goods during the mentioned four-year period. These findings form the basis of the significant financial penalty.

Company Response

Axel Polymers has firmly stated that it disagrees with the adjudicating authority’s conclusions. The company is preparing to file an appeal under Section 107 of the CGST Act, 2017. Furthermore, the management intends to file a Writ Petition with the Hon'ble Gujarat High Court to seek relief against this order.

Impact on Operations

Despite the significant monetary demand, the management has explicitly stated that the order is not expected to disrupt or impact the company’s routine business operations. The financial liability remains subject to the final outcomes of the pending legal proceedings.

Risks to watch

The primary concern for shareholders is the potential cash outflow or the requirement to create financial provisions if the legal challenge does not result in a stay or reversal of the order. Investors should monitor updates regarding the High Court filings and any subsequent tribunal hearings.