Orient Cement Limited informed that the Company has received Order from Assistant Commissioner, Central Tax, Gulbarga, Karnataka raising demand for GST of INR 5,824,000 together with interest and equivalent penalty for alleged short payment of GST on Royalty on Leasing Services for extraction of minerals. The Company intends to contest the order, since it has a strong case on merit. Order passed confirming demand for GST INR 5,824,000 + interest + Penalty on differential GST @13% (18% less 5%) on royalty paid on Leasing Services for extraction of minerals.

The Company has been alleged for the short payment of GST on Royalty paid on Leasing Services for extraction of minerals by 13%. As, the Company had paid GST under the Reverse Charge Mechanism (RCM) at 5%, whereas the department is demanding payment at 18% based on a retrospective amendment. It was revenue neutral to the company as company was eligible for input credit.

The order has no major financial impact on the Company and is limited to the extent mentioned at point 2 above. The company has a strong case on merit and intends to contest the order.