Reliance Industries Receives ₹56.44 Crore Tax Penalty Order, Plans to File Appeal

Mumbai/Ahmedabad:  Reliance Industries Ltd., led by Mukesh Ambani, announced on Friday that it has received a penalty order amounting to ₹56.44 crore from the Joint Commissioner of Central GST (CGST) in Ahmedabad.

The order, issued on November 25, classifies a portion of the company's input tax credit (ITC) as “blocked credit.” However, Reliance stated that the order was passed without considering how the service provider had categorised the services in question.

“In accordance with Section 74 of the Central Goods and Services Tax Act, 2017, along with applicable provisions under the Gujarat Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017, the company has received an order dated November 25 imposing a penalty of ₹56.44 crore,” Reliance said in a regulatory filing.

The company informed stock exchanges that it received the order via email on November 27 at 11:04 a.m. and intends to challenge the decision through an appeal.

According to Reliance, the financial impact of the order is limited solely to the penalty amount, as the interpretation of “blocked credit” was made without taking into account the service provider’s service classification. The company stressed that the order will not affect its operations or business activities.

“The economic impact of the order is restricted to the imposed penalty. There will be no impact on the company’s operations or other business activities,” the filing added.

Reliance shares, which recently touched a 52-week high, opened slightly lower during Friday’s early trade but quickly recovered. Shortly after the market opened, the stock rose 0.12% to ₹1,565.50 on the BSE Sensex.