Innova Captab faces significant tax demand for alleged excess ITC refund

Innova Captab Limited announced on October 16, 2025, that it has received a show cause cum demand notice under Section 74 of the Central Goods & Services Tax (CGST) Act, 2017. The notice, issued by the Central Goods & Services Tax Commissionerate, Shimla, relates to an alleged claim of excess refund of accumulated Input Tax Credit (ITC) by the company. The period in question spans from May 2020 through March 2024.

The financial implications of this demand total ₹15,81,37,255.40, alongside interest and penalty under relevant sections of the CGST Act, 2017. The authority has identified the alleged issue as an "ineligible refund under Rule 89(4) of CGST Rules, 2017." Innova Captab is required to respond within 30 days of its receipt.

The company maintains that the show cause notice has no merits and intends to submit its detailed response to the adjudicating authority within the specified timelines. The notice also proposes that appropriate interest and a penalty of ₹15,81,37,255.40 should not be imposed on the company.