Dalmia Cement Gains Major Relief as Tamil Nadu Drops Tax Demand

Dalmia Cement Bharat Limited, a wholly owned subsidiary of Dalmia Bharat, has received significant relief after the Tamil Nadu based tax authority withdrew tax and penalty demands amounting to Rs 266.3 crore. The company confirmed the development in a regulatory filing, stating that the decision would have no financial impact on its operations.

According to the filing, the Sales Tax Officer in Lalgudi, Tiruchirappalli had earlier issued show cause notices under Section 74 of both the Central Goods and Services Tax Act 2017 and the Tamil Nadu Goods and Services Tax Act 2017. These notices were issued for Assessment Years 2019 to 2020 and 2022 to 2023 based on differences observed in taxable turnover and claimed Input Tax Credit during those periods.

For the Assessment Year 2019 to 2020, the authorities had demanded a tax of approximately Rs 128.39 crore along with a penalty of Rs 19.25 crore. For the Assessment Year 2022 to 2023, the department raised a tax demand of Rs 59.32 crore and an equivalent penalty. These cumulative demands had led to a proposed liability of Rs 266.3 crore for the company.

During adjudication, the department reviewed the discrepancies and concluded that the proposed claims were not sustainable. As a result, all related tax and penalty demands were officially dropped. Dalmia Cement stated that this outcome underscores the importance of detailed record verification and compliance clarity as part of the GST framework.

Founded in 1939, Dalmia Bharat is India’s fourth largest cement manufacturer with an installed capacity of 49.5 million tonnes per annum. The company continues to expand its presence across the country with a focus on long term growth, operational efficiency, and sustainability driven manufacturing processes.

The withdrawal of the tax demand provides additional stability to the company at a time when the cement sector is witnessing rising input costs and fluctuating demand cycles. Industry observers view this development as a positive compliance milestone that helps reinforce investor confidence and operational continuity for one of India’s major cement producers.