Zee Entertainment faces ₹119.6 crore GST demand as tax authority upholds DGGI orders

Zee Entertainment Enterprises Ltd (ZEEL) has received adjudication orders from the Additional Commissioner of Central Goods and Services Tax (CGST) and Central Excise, Palghar Commissionerate, in two separate goods and services tax (GST) matters involving disputed input tax credit (ITC), the company said in a regulatory filing on Monday.

The orders pertain to two show cause-cum-demand notices issued earlier by the Directorate General of GST Intelligence (DGGI), alleging wrongful availment of GST input tax credit by the company on account of lapses attributed to its vendors. The adjudicating authority has completed proceedings in both cases and upheld the tax demands raised by the DGGI.

According to the disclosure made under Regulation 30 of the Securities and Exchange Board of India (SEBI) Listing Regulations, the first show cause notice involves a tax demand of ₹869 crore, excluding interest and penalties. The second notice pertains to a demand of ₹327 crore, also excluding interest and penalties. Together, the two matters amount to a total disputed tax demand of ₹119.6 crore.

Zee Entertainment stated that while adjudication has been completed in both cases, it is contesting the demands on merits and based on legal advice received. The company did not disclose the timeline or forum for further appeal but indicated that it would pursue appropriate legal remedies against the orders.

The company also clarified that the amounts mentioned in the adjudication orders exclude interest and penalty components, which could significantly increase the overall financial exposure if the demands are eventually upheld. The disputes arise from allegations that certain vendors had wrongfully availed or passed on GST credits, resulting in disputed ITC claims at Zee’s end.

The disclosure has been made in compliance with SEBI’s disclosure requirements, including SEBI Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155, which mandates listed entities to report material developments in litigation, regulatory actions, and tax-related matters.

Zee Entertainment further stated that the proceedings do not involve any litigation against its promoters, key managerial personnel, or ultimate persons in control of the company. No settlement has been reached in either case, as both matters remain under contest.

The development comes amid heightened scrutiny by tax authorities on GST compliance, particularly in cases involving alleged misuse of input tax credits through vendor-related irregularities.