Nestlé India Faces ₹1.8 Crore GST Demand Impacting Dairy Sector

Nestlé India, a major player in the packaged food and dairy industry, has received a ₹1.8 crore GST demand order. This order, equivalent to approximately $216,000 USD, highlights ongoing challenges multinational agribusinesses face regarding compliance with complex regulatory frameworks. The demand includes components such as ₹74.83 lakh for Central Goods and Services Tax (CGST) and a similar amount for State Goods and Services Tax (SGST), along with ₹29.17 lakh for Integrated Goods and Services Tax (IGST).

Additionally, a penalty of ₹1.49 lakh has been imposed, further increasing the financial burden on the company. This action follows an audit conducted by the jurisdictional tax office for the fiscal year 2022-23, resulting in an Assessment Order under Section 73 of the GST Act. Nestlé India plans to contest the order, which may lead to further legal proceedings.

For manufacturers and analysts in the global dairy sector, this case underscores the financial risks associated with indirect tax compliance. The total demand, comprising various GST components and penalties, serves as a critical data point for assessing regulatory costs. The potential dispute resolution phase will be closely monitored by the international agribusiness community.