UltraTech Cement Faces Rs 390 Crore GST Demand Amid Legal Challenge

UltraTech Cement Limited has been issued a tax demand order amounting to approximately Rs 390 crore by the Joint Commissioner of Central Goods and Services Tax and Central Excise in Patna. The order alleges the company has short-paid Goods and Services Tax (GST) and improperly utilized input tax credits, among other issues. In addition, UltraTech is required to pay a penalty equal to the tax demand and interest estimated at around Rs 28 lakh.

The regulatory filing from UltraTech states that the demand covers the period from the financial year 2018-19 to 2022-23. The combined total of the penalty and interest represents nearly two-thirds of the company’s profit of Rs 1,232 crore reported for the second quarter ended September 2025. The filing detailed the order as follows: “Order in Original passed upholding tax liability of Rs 3,90,95,58,194 plus applicable interest on tax demand; additional interest Rs 27,68,289 and penalty of Rs 3,90,95,58,194.”

Company’s Response and Financial Outlook

In response to the tax demand, UltraTech Cement announced its intention to explore all legal avenues to contest the order. The company emphasized that it does not anticipate any operational or financial impact from this situation. “The Company is reviewing the Order, considering all legal options, and accordingly would be contesting the demand,” the statement noted.

The company is scheduled to release its earnings for the ongoing third quarter on January 24, 2026. Despite the tax issues, UltraTech reported a strong performance in the previous quarter, with revenue increasing by 20.3 percent year-on-year to Rs 19,607 crore.

Investors have responded cautiously to the news. UltraTech Cement’s shares have largely remained flat throughout the year, closing at Rs 11,497, reflecting a modest increase of Rs 36 or 0.31 percent on the latest trading day.

Implications for the Cement Industry

This significant tax demand could set a precedent for other companies in the cement industry regarding GST compliance and input tax credit usage. As India continues to refine its GST framework, companies may need to reassess their tax strategies to avoid similar disputes.

The outcome of UltraTech’s legal challenge will likely be closely monitored by industry stakeholders and could influence the broader market sentiment towards compliance issues within the construction and manufacturing sectors.