Blue Dart Express shares in focus after Rs 420 crore GST demand notice to subsidiary

Shares of Blue Dart Express Ltd are expected to be in focus on Wednesday, September 17, after the company disclosed that its wholly owned subsidiary, Blue Dart Aviation Limited (BDAL), has received a Show Cause Cum Demand Notice (SCN) from the Office of the Commissioner of GST and Central Excise involving alleged tax dues totalling approximately Rs 420 crore.

In an exchange filing, the company stated that the notice was received on September 15 and pertains to alleged contraventions under the CGST Act, 2017, and TNGST Act, 2017, covering the tax period from April 2021 to March 2023.

The SCN, issued by the Office of the Commissioner of GST and Central Excise (Chennai South Commissionerate), outlines the following key allegations:

• Rs 365.58 crore in GST (comprising CGST of Rs 182.79 crore and SGST of Rs 182.79 crore) is alleged to have been paid under the wrong tax head (IGST instead of CGST & SGST) during the financial years 2021-22 and 2022-23. The authorities have questioned the validity of claiming this under IGST and have sought recovery.
  
• An additional Rs 54.55 crore of IGST is alleged to be ineligible Input Tax Credit (ITC), claimed based on invoices issued from locations not falling under the relevant jurisdiction. The authorities argue that this ITC was wrongly availed.
  
• A further Rs 0.64 crore has been cited as ITC/CENVAT credit written off in the books, for which recovery has been proposed.
  

In addition to the principal tax demands, the notice also discusses why associated penalties and interest under various provisions of the CGST Act and IGST Act should not be levied on the subsidiary.

The company has been asked to respond within 30 days to the Additional/Joint Commissioner of GST & Central Excise, explaining why these sums should not be recovered.

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Blue Dart Express shares closed 0.6% higher at Rs 5,742.40 on the BSE on Tuesday.

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