Orient Electric Limited received order from Joint Commissioner (Anti Evasion), CGST & Central Excise, Thane Commissionerate. Nature and details of the action(s) taken, initiated or order(s) passed: Intimation of tax liability under Section 74(5) of the CGST Act, 2017. Intimation of tax ascertained as being payable under Section 74(5) received via e-mail on June 28, 2024.

The issues raised in the DRC-01A are as under: Import of goods at a higher rate of GST and further supply at the correct lower rate of GST: The company had imported goods falling under Entry no. 438A and paid IGST at the higher rate of 18% and availed credit of the same. The said goods have been supplied by the Company to its customers by classifying it under the heading under entry number 226 and 227 of Schedule 11 of Notification No.

01/2017 CT (Rate) dated June 28, 2017 and paid GST @12% instead of 18%. Accordingly, the department has raised the differential demand of INR 196,820,503/- on the supplies made by the company. Payment of GST on moulds supplied on free of cost basis by company to supplier: The Company had imported moulds and availed IGST INR 6,083,239.

Thereafter, the same was sent to Supplier on free of cost basis under a delivery challan without preparation of invoices and payment of GST. The department has alleged that the same is a supply under GST and accordingly, invoice was to be issued. Based on the abovementioned grounds, the company has been advised to pay total tax of INR 203,207,905/- and interest as applicable or contest by filing reply.

In terms of the DRC-01A, the Company has been advised to pay tax of INR 203,207,905 and interest as applicable by July 8, 2024. The Company has the option to file its submission by July 08, 2024 in Part B of the Form GST DRC-01A. In this regard, the Company will be filing a reply against the above ascertainment with the department.

Further, going forward, if the need arises, the Company will be contesting the matter. At present, there is no adverse impact on the operation or other activities of the Company owing to the DRC-01A issued.