Court Grants Relief to Coca-Cola Over Rs 2,500 Crore GST Dispute

The Bombay High Court has issued an interim stay on a Rs 2,500 crore GST demand against Hindustan Coca-Cola Beverages. The court found the revenue department's interpretation to be 'prima facie incorrect.' The dispute centers around alleged undervalued goods via retrospective distributor discounts.

The Bombay High Court has provided temporary relief to Hindustan Coca-Cola Beverages, granting an interim stay on a GST demand amounting to about Rs 2,500 crore. The court noted that the revenue department's interpretation of the provisions seemed 'prima facie incorrect.'

A show cause notice was initially issued in January, pointing to the undervaluation of goods over seven assessment years, allegedly through retrospective discounts given to distributors. The authorities argued that such discounts reduced the taxable value of supplies, accusing the company of structuring these discounts to evade tax.

In a hearing on April 1, Justices BP Colabawalla and Firdosh Pooniwalla noted that the case presented by Coca-Cola was strong for staying the enforcement of the order. The court has scheduled further hearings for April 29, as the legal battle hinges on interpreting specific sections of the Central Goods and Services Tax Act.

(With inputs from agencies.)