Tata Steel is currently under scrutiny following a show cause notice from tax authorities regarding an alleged irregular availment of input tax credit (ITC) amounting to ₹1,000 crore. The notice, which has put Tata Steel shares in focus, was issued by the Office of the Commissioner (Audit), Central Tax, Ranchi, on June 27, 2025.

The tax authorities are alleging that Tata Steel availed ITC in contravention of Section 74(1) of the CGST/SGST Act, 2017, read with Section 20 of the IGST Act. This section pertains to cases where there might be misuse or incorrect claims of input tax credits, which are subject to examination by the authorities. Under GST law, businesses can claim credit for input taxes paid on purchases used in the course of business to offset their output tax liability.

The notice directs Tata Steel to appear before the Additional/Joint Commissioner of Central GST & Central Excise, Jamshedpur, Jharkhand, within 30 days to explain why Goods and Services Tax (GST) amounting to ₹1,007.54 crore for the period FY2018-19 through FY2022-23 should not be recovered from the company.

Tata Steel, in its filing to the stock exchanges, clarified that it has already paid ₹514.19 crore in GST during the relevant period in the normal course of business. According to the company, the remaining GST exposure is ₹493.35 crore, after adjusting for the amount already paid. The company has stated that it believes the show cause notice has no merit and intends to submit its response to the appropriate forum within the given timelines.

Tata Steel has also reassured its stakeholders that the notice will not have any impact on its financial, operational, or other business activities. The company emphasized its commitment to complying with regulatory requirements and expressed confidence in resolving the matter in its favor.

The situation remains dynamic, and further developments are expected as Tata Steel prepares its response and engages with the tax authorities.