Welspun Enterprises Limited has announced that its subsidiary, Welspun Sattanathapuram Nagapattinam Road Private Limited (WSNRPL), has received Show Cause Notices (SCNs) from the Tamil Nadu State Goods and Service Tax (GST) Authority. The notices, dated 20 May 2026, allege a tax discrepancy amounting to ₹179,87,33,835 along with applicable interest and penalties.
The SCNs were issued under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017, covering the financial years from 2020-21 to 2025-26. The primary issue cited in the notices pertains to an alleged difference between the turnovers reported by WSNRPL in Form GSTR-3B and the reporting done by their client in Form GSTR-7, which is the statement of GST TDS deduction filed by the client.
The discrepancy arises from the client’s deduction and reporting of GST TDS for the entire project in Tamil Nadu, without accounting for the fact that the project spans two jurisdictions: the State of Tamil Nadu and the Union Territory of Puducherry. The GST TDS should have been deducted and reported separately for these two regions.
Welspun Enterprises has stated that WSNRPL has a strong case on merits, as it has correctly discharged tax on services provided in Tamil Nadu. The company plans to file a detailed reply against the SCNs and does not anticipate any material impact on its financial, operational, or other activities as a result of these notices.
This situation mirrors a previous issue where a similar show cause notice was issued, and the demand was subsequently dropped by the jurisdictional tax authorities.
The SCNs were received by WSNRPL on 21 May 2026, and the company is taking appropriate steps to address the allegations.
Disclaimer: This article is based on a regulatory filing submitted to the National Stock Exchange of India (NSE).