National Fertilizers Ltd Receives Rs. 116.01 Crore GST Demand for Alleged Wrongful Refunds of ITC
National Fertilizers Limited (NFL) has received a Rs. 116.01 crore GST demand from the Central Tax Department for alleged wrongful refunds of Input Tax Credit claimed under the inverted tax structure
National Fertilizers Ltd - GST Demand - ITC
National Fertilizers Ltd - GST Demand - ITC
National Fertilizers Limited (NFL) has received a demand notice of Rs. 116.01 crore from the Office of the Commissioner of Central Tax, Guntur. The notice relates to the alleged wrongful refund of Input Tax Credit (ITC) claimed under the inverted tax structure for the financial year 2022-23.
The order was issued on September 23, 2025, and received by the company on September 25, 2025. According to the order, the tax department has stated that refunds claimed by NFL during the period from April 2022 to March 2023 were not admissible and have now been treated as erroneous refunds.
The department has asked the company to repay the amount along with applicable penalty and interest. In its report, the company has disclosed that the total demand raised amounts to Rs. 116.01 crore. The company clarified that this order will not have any material impact on its financial or operational activities at present.
The company also stated that it is reviewing the order and will exercise its right to file an appeal before the Commissioner (Appeals). Such appeals are a normal part of the process under tax law, and the final outcome will depend on the decision of the appellate authority.
An inverted tax structure occurs when the tax rate on inputs is higher than the tax rate on outputs, leading to accumulation of input tax credit. Businesses are allowed to claim refunds in such cases, subject to certain conditions. The tax department has alleged that NFL’s refund claims under this structure were not in compliance with the applicable rules.
About the Company
National Fertilizers Limited is a Navratna public sector undertaking under the Ministry of Chemicals and Fertilizers, Government of India. The company, headquartered in Noida, manufactures and markets a wide range of chemical fertilizers, industrial products, and seeds. Its shares are listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
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