₹2,500 Crore GST Demand on Coca Cola: Bombay HC Stays Revenue Proceedings after Noting Infirmity in Undervaluation Claims [Read Order]
It was alleged by the Revenue that Coca Cola had systematically undervalued its goods over the course of seven assessment years
![₹2,500 Crore GST Demand on Coca Cola: Bombay HC Stays Revenue Proceedings after Noting Infirmity in Undervaluation Claims [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/GST-Demand-Coca-Cola-Bombay-HC-Revenue-Proceedings-Noting-Infirmity-Undervaluation-Claims-TAXSCAN.jpg "₹2,500 Crore GST Demand on Coca Cola: Bombay HC Stays Revenue Proceedings after Noting Infirmity in Undervaluation Claims [Read Order]")
The Bombay High Court recently stayed a Goods and Services Tax (GST) demand of approximately ₹2,500 crore raised against Hindustan Coca-Cola Beverages Pvt. Ltd., observing that the revenue authorities’ interpretation of the statutory provisions in claiming that Coca Cola had undervalued its goods was prima facie flawed. The controversy originated from a show cause notice issued on...
The Bombay High Court recently stayed a Goods and Services Tax (GST) demand of approximately ₹2,500 crore raised against Hindustan Coca-Cola Beverages Pvt. Ltd., observing that the revenue authorities’ interpretation of the statutory provisions in claiming that Coca Cola had undervalued its goods was prima facie flawed.
The controversy originated from a show cause notice issued on August 4, 2024, wherein the revenue authorities alleged that the company had systematically undervalued its goods over seven assessment years through a discounting mechanism offered to its distributors.
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Coca Cola, appearing through S. Ganesh, Ajay Aggarwal, Jitendra Motwani, Rinkey Jassnja, Diva Devarsha instructed by Economic Laws Practice contended that the Revenue had erroneously concluded that the Petitioner’s distributor first extended discounts to the retailers and then the Petitioner had given sales discount to the distributor in subsequent supplies on the basis of the same discounts, which had been recorded in the Distributor Management System of the Petitioner.
On the other hand, Maya Mazumdar, along with Suman Kumar Das, appearing for the Joint Commissioner of CGST, defended the demand, submitting that the discounting arrangement adopted by Hindustan Coca-Cola was designed to artificially lower the transaction value and consequently evade GST dues.
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The Division Bench comprising Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla heard the submissions made by either side and found the revenue’s reasoning to be prima facie incorrect. The Bench further directed that the respondents may file their affidavits/affidavit-in-rejoinder if they so wish, before 22 April, 2025.
Furthermore, the Bench prima facie observed infirmity with the impugned order and thus granted an ad-interim relief staying the implementation of the order and preventing any coercive steps pursuant to the show-cause notice or the final order.
The Bombay High Court proceeded to post the matter to 29 April, 2025 for admission and possible disposal.
To Read the full text of the Order CLICK HERE
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