IT services major LTIMindtree on 13 August announced that they have received an order from the department of Goods and Service Tax (GST), Office of the Deputy Commissioner of State Tax in Mumbai worth Rs 62.4 crore for the denial of zero-rated supply provision. 

According to the GST rules, zero-rated supply refers to the supply of goods or services that are subject to nil GST, indicating that the supplier does not have to charge any GST on the supply. 

In its regulatory filing, the company said, “The company has received an order under Section 73 of the Maharashtra Goods & Services Tax Act, 2017 raising a tax demand amounting to Rs 624 million (including penalty of Rs 30 million and interest as applicable) for FY 2019-20.”

The company added that the reason behind the penalty was “denial of zero-rated supply, thereby leading to proportionate reversal of Input Tax Credit.”

However, the company has called this order unjustified based on assessment of facts and prevailing law. The company will take appropriate legal actions against this order after consulting with its advisors. 

According to the company, this order has no material impact on the company’s financials or operations. 

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