Farm Peace Has a Rs 5.69 Crore Confirmed GST ITC Demand

Farm Peace faces multiple pending Goods and Services Tax, or GST, proceedings in which authorities confirmed demands over allegedly ineligible input tax credit, or ITC, from fictitious or cancelled suppliers. The largest disclosed order, dated March 16, 2026 for FY 2019-20, confirmed a total demand of Rs 5.69 crore, including tax, interest and penalty.

Why does Farm Peace have a confirmed GST ITC demand?

Farm Peace has four specified confirmed GST orders for FY 2018-19 and FY 2019-20 that together amount to Rs 9.32 crore. These comprise Rs 2.30 crore and Rs 8.93 lakh for FY 2018-19, plus Rs 5.69 crore and Rs 1.24 crore for FY 2019-20; each matter was described as pending in the prospectus.

The largest individual demand is Rs 5.69 crore under an order dated March 16, 2026, following an April 12, 2024 show-cause notice for FY 2019-20. The order comprises Rs 1.80 crore of tax, Rs 2.09 crore of interest and Rs 1.80 crore of penalty, making interest the largest component of that demand.

The Rs 2.30 crore FY 2018-19 demand arose from a December 10, 2025 order under Section 74 of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017. It includes Rs 69.86 lakh of tax, Rs 90.50 lakh of interest and Rs 69.86 lakh of penalty, following allegations that Farm Peace took ITC on supplies from non-existent or fictitious suppliers.

How did GST authorities reach the Farm Peace ITC findings?

GST authorities said Farm Peace's claimed ITC did not meet conditions under Section 16 of the Central Goods and Services Tax Act because the underlying goods were not actually received. In the March 16, 2026 FY 2019-20 order, the department said 12 suppliers were non-genuine or non-existent at their registered premises and had issued invoices without actual movement of goods.

The adjudicating authorities relied on more than supplier-registration status. In cases involving Royal Sales Corporation, Keya Group and Shivam Traders, they examined GST portal data, transport records, toll-plaza data obtained from the National Highways Authority of India, statements by Farm Peace's director and GST returns before concluding that invoices lacked an actual underlying supply.

For the Rs 1.24 crore FY 2019-20 order dated March 16, 2026, authorities accepted Farm Peace's argument only in part. They excluded six suppliers already covered in earlier proceedings, but confirmed the demand relating to four remaining suppliers found through registration cancellation, Central GST or Directorate General of GST Intelligence investigation, or search proceedings to be non-genuine firms passing ITC without actual supply.

What was Farm Peace's response to the GST allegations?

Farm Peace has said its purchases were genuine and that goods were physically received and paid for through banking channels. In proceedings arising from August 25, 2025 orders for FY 2020-21 and FY 2021-22, Farm Peace said it had provided invoices, e-way bills, weighment slips, photographs of loaded and unloaded vehicles, driver details, affidavits and other records.

Farm Peace also argued that certain credits appeared in GSTR-2A or GSTR-2B, GST return statements that reflect purchase-side invoice information uploaded by suppliers. In the Rs 5.69 crore FY 2019-20 proceeding, Farm Peace said invoices, bank statements or reflected credit supported genuine transactions, but the department held that these records alone did not establish actual receipt of goods.

Farm Peace has also contested whether some actions duplicated earlier adjudication or were filed in time. In the Rs 8.93 lakh FY 2018-19 matter involving M/s Lucky Enterprises, the authority rejected Farm Peace's duplication objection because the earlier order concerned M/s Balaji Buildcon and M/s Bhumika Tubes, while the later proceeding concerned a distinct supplier.

Which pending cases show the broadest financial exposure?

The disclosed matters span FY 2018-19 through FY 2024-25, with the largest confirmed order concentrated in FY 2019-20. The FY 2019-20 Rs 5.69 crore order covers 12 alleged fictitious suppliers, whereas the separate Rs 1.24 crore FY 2019-20 order was narrowed to four residual suppliers after six previously covered suppliers were excluded.

For FY 2020-21, Farm Peace disclosed a proposed Rs 5.22 crore demand in a July 10, 2026 show-cause notice. The department alleged ITC from suppliers whose registrations had been cancelled before invoice dates and from non-genuine taxpayers; Farm Peace said a March 5, 2024 notice concerned the same issue, but the department said the supplier transactions and amounts differed.

For FY 2021-22, a Rs 2.48 crore proceeding from an April 12, 2024 show-cause notice remained pending. A separate order dated December 18, 2025 reduced another FY 2021-22 scrutiny case to Rs 2.02 lakh after dropping three of five issues, leaving a GSTR-3B and GSTR-2A mismatch of Rs 85,313 and a residual claim involving car-insurance premium under Section 17(5).

What do the confirmed orders mean for Farm Peace's compliance position?

The orders show that adjudicating authorities rejected Farm Peace's evidence in several specified proceedings, but the prospectus states the matters remain pending rather than finally resolved. Section 74 was used in the larger ITC cases, with orders generally imposing recovery of disputed tax, interest and an equivalent penalty, which explains why demand totals can exceed the alleged credit.

The contrast with the Rs 2.02 lakh FY 2021-22 outcome shows that the department did not sustain every initial issue. In that case, three issues were dropped because reverse-charge liabilities had already been paid with interest through DRC-03, or because e-way bills related to purchase returns or debit notes rather than taxable outward supplies.

Farm Peace also has appellate proceedings in the disclosed set. In a Rs 21.75 lakh matter concerning M/s Bhumika Tubes, M/s Balaji Buildcon and M/s Arihat Traders, an appellate authority rejected Farm Peace's appeal on February 17, 2026; Farm Peace then filed an appeal before the GST Appellate Tribunal on June 29, 2026, which remains pending.

Conclusion

Farm Peace's disclosed GST litigation is not limited to a single supplier or tax year: confirmed demands of Rs 9.32 crore across four specified FY 2018-19 and FY 2019-20 orders show repeated findings that claimed ITC was linked to non-genuine suppliers or transactions without proven goods movement. The largest, Rs 5.69 crore, includes Rs 2.09 crore of interest and shows how interest and equivalent penalties increase the amount beyond disputed tax.

The next developments to watch are adjudication of the Rs 5.22 crore FY 2020-21 show-cause notice, the pending FY 2021-22 Rs 2.48 crore matter, and the GST Appellate Tribunal appeal filed on June 29, 2026 in the Rs 21.75 lakh case. Their outcomes will depend on the treatment of Farm Peace's documentary evidence, supplier-specific overlap arguments and the authorities' findings on actual receipt of goods.