United Breweries Limited disclosed on Friday, April 5, that it has received a tax demand totaling Rs 263.72 crore from the Maharashtra State Goods & Service Tax (GST) Department.
As per regulatory filings, the GST department issued an order under Section 9(2) of the Central Sales Tax Act, 1956, imposing an additional tax amounting to Rs 119.8 crore, along with interest of Rs 115 crore and a penalty of Rs 28.8 crore, totaling Rs 263.7 crore for the financial year 2020.
This demand order arises from a 60 percent central sales tax (CST) imposed on debit notes issued by UBL to Telangana State Beverage Corporation (TSBCL), Karnataka State Beverage Corporation (KSBCL), and Andhra Pradesh State Beverage Corporation (APBCL). These debit notes were raised to reimburse state excise duties paid by UBL on behalf of the State Beverage Corporations during the fiscal year 2020, as mentioned by the liquor manufacturer.
The company believes it has a strong defense for the issue before the relevant appellate authority and anticipates minimal financial impact, apart from a statutory pre-deposit required at the time of appeal admission.
This is not the first time the company has faced such an order. Previously, it encountered a demand of Rs 275 crore, which was subsequently reduced to Rs 7 crore after favorable resolution.
On April 5, the stock closed at Rs 1,806, marking a 1.5 percent increase from the previous close on the NSE. The United Breweries stock has experienced a decline of almost 5 percent over the last three months.
