LTIMindtree Receives GST Demand Notice of Rs 62.4 Crore

LTIMindtree Limited is an Indian multinational information and technology (IT) services and consulting company based in Mumbai. Founded in 1996 as a subsidiary of Larsen & Toubro, it now employs over 81,000 people. Recognized as a leader in the IT industry, LTIMindtree delivers innovative solutions to clients globally. With a strong emphasis on technology and customer satisfaction, the company continues to expand its international presence. The dedication and expertise of its workforce have been crucial to LTIMindtree’s success and its reputation as a trusted partner for businesses undergoing digital transformation.

Rs. 62 crore GST fine: 

LTIMindtree, following Infosys, has been ordered to pay Rs. 62.4 crore in Goods and Service Tax (GST) due to the denial of zero-rated supply provision. A zero-rated supply is a concept within the Goods and Services Tax (GST) system that refers to goods or services that are exempt from GST, meaning they are taxed at a rate of zero percent. In practical terms, this means that the supplier is not required to collect any GST on the transaction.LTIMindtree announced in its exchange filing that it received a tax demand of Rs. 624 million (including a Rs 30 million penalty and applicable interest) for FY 2019-20 under Section 73 of the Maharashtra Goods & Services Tax Act, 2017. LTIMindtree mentioned that the penalty was imposed due to the rejection of zero-rated supply, leading to a corresponding reversal of Input Tax Credit. The company deems this order unjustified based on past assessments and applicable law, and will pursue legal action after consulting advisors. It asserts that the order will not materially impact its finances or operations, which is reflected in the stock price as well.

LTIMindtree Ltd stock price:

LTIMindtree is currently running with Rs. 5,384.45 per share where stock is showing smaller decline today. 

Conclusion: LTIMindtree is the second company, after Infosys, to face a GST penalty for past transactions. However, LTIMindtree believes the penalty is unjust and plans to contest it legally.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.