ideaForge Technology has received an order from the GST department demanding Rs 109.17 crore, including a tax shortfall of Rs 54.59 crore and an equal penalty. The dispute centers on the GST rate applied to drones for the period between January 2022 and March 2024. The company maintains that it followed the correct 5% GST rate, supported by a 2025 government clarification, and intends to contest the order in the appellate court.
ideaForge Technology Faces Rs 109 Crore Tax Demand
Tax Liability: Rs 54.59 crore | Total Demand (with penalty): Rs 109.17 crore
Reader Takeaway: Management expects a favorable outcome through appeals, citing recent government clarity on drone tax rates.
What just happened
ideaForge Technology Limited has been served an order by the Additional Commissioner of CGST & Central Excise, Belapur. The tax authority claims a shortfall in Goods and Services Tax (GST) payments for the period spanning January 2022 to March 2024. The total demand amounts to Rs 109.17 crore, which includes a tax liability of Rs 54.59 crore and an equivalent amount in penalties.
Why this matters
The dispute revolves around the GST classification of the company's drone products. Authorities allege that the company incorrectly applied a 5% GST rate, claiming a differential of 13% should have been applied. For shareholders, this represents a significant contingent liability. However, the company contends that its tax filings were correct, noting that the government issued a formal clarification in 2025 confirming that the applicable GST rate for drones is indeed 5%.
What changes now
ideaForge has officially stated its intent to appeal the order before the appropriate Appellate Authority. The company is confident that its legal position is sound based on the 2025 government clarification. Currently, the company does not anticipate any immediate or material impact on its day-to-day operations or financial stability while the appellate process is underway.
Risks to watch
The primary risk remains the potential for financial outflow if the appellate authority does not rule in favor of the company. Investors should closely monitor filings regarding the progress of the legal appeal and any further communication from GST authorities regarding this specific assessment period.
What to track next
The timeline for the appellate filing and any subsequent stay orders granted by the authorities will be the key indicators of how this dispute will be resolved.