National Fertilizers Ltd Receives ₹94.84 Crore GST Demand Notice for Undue Refund of Accumulated ITC

National Fertilizers Limited (NFL), a Navratna public sector enterprise under the Government of India, has reported receiving a demand order of Rs. 94.84 crore from the Commissioner of Central Tax, Guntur, in connection with alleged wrongful refund claims under the Goods and Services Tax (GST) regime.

The order, dated April 30, 2025, pertains to the period from April 2018 to December 2020, and accuses the company of claiming undue refunds of accumulated InputTax Credit (ITC) under the inverted duty structure. According to the tax department, the issue is that the accumulated ITC is not due to a higher tax rate on inputs compared to outputs, which is a prerequisite for refund eligibility under the GST rules.

The demand has been made via Order-in-Original No. GUN-GST-000-ADC-09/2025-26-GST, issued by the Office of the Commissioner of Central Tax, Guntur.

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In its statement, the NFL clarified that the matter is under review and that the company intends to exercise its right to appeal the decision before the Commissioner (Appeals). The NFL also explained that the demand does not have a material impact on its current financial or operational activities.

This development comes under the purview of disclosures required for significant legal and regulatory developments, as the NFL continues to comply with corporate governance and transparency norms.

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