GR Infraprojects gets ₹321.60 cr GST notice in 2026

What happened and why it matters

G R Infraprojects has received a GST show cause notice proposing a demand of ₹321.60 crore from Madhya Pradesh state tax authorities. The notice relates to the period from April 2020 to March 2021 and has been issued under Section 74 of the CGST Act, 2017, read with the MPGST Act, 2017. The company said it is preparing its response and does not anticipate any material financial impact or liability at this stage.

For investors, the development matters because the proposed demand includes tax, interest, and penalty, even though it is not a final adjudication. The case also arrives in a period when the company and its group entities have had multiple GST-related legal outcomes, including a High Court ruling involving annuity payments and a Supreme Court decision on the quality of Section 74 notices.

The notice details: authority, form, and period

The notice was issued in Form GST DRC-01 and is dated August 25, 2026. It has been issued by the Office of the Joint Commissioner of State Tax, Ratlam Division, Indore. The relevant period covered is April 2020 to March 2021, which aligns with FY 2020-21.

The company has disclosed that the proposed demand totals ₹321.60 crore. It also stated that the demand amount comprises tax, interest, and penalty, indicating that the exposure described in the notice is not limited to the core tax component.

What the tax department is alleging

According to the notice, the proposed demand is based on discrepancies observed by the department for FY 2020-21. These include alleged excess or ineligible availment of input tax credit (ITC). The notice also cites mismatches between e-way bill data and GSTR-3B data.

Such mismatches are often examined as part of reconciliation checks between movement of goods (as reflected in e-way bills) and tax returns (GSTR-3B). The notice frames these as discrepancies that warrant a proposed demand under Section 74, which is typically invoked where tax authorities allege more serious conduct compared with regular mismatch cases.

What a show cause notice means in practice

A show cause notice (SCN) is a formal communication asking the taxpayer to explain why the proposed tax demand should not be confirmed. The company noted that issuance of an SCN does not constitute a final tax adjudication. Any final demand or penalty order would typically come after the taxpayer responds and the department considers that response.

This distinction is important because the ₹321.60 crore figure is a proposed demand. The outcome depends on the company’s reply, supporting documentation, and the adjudication process that follows.

Company’s response and stated financial impact

G R Infraprojects said it is preparing its response to the notice. It also stated that it believes it has strong legal and factual grounds to defend its position.

Crucially, the company said it does not currently anticipate any material financial impact or liability arising from the proposed demand. This is a standard clarification in such disclosures, but it also signals that management believes the allegations can be addressed through the legal and factual record it intends to present.

Another GST issue: Rajasthan HC ruling on annuity payments

Separately, the Rajasthan High Court dismissed writ petitions filed by the company’s subsidiary, Nagaur Mukundgarh Highways Private Limited. The subsidiary had challenged the levy of GST on annuity payments received under concession agreements.

The aggregate amount involved in that litigation is approximately ₹69.79 crore. The High Court judgment is dated August 17, 2026, and the company received it on August 18, 2026. The petitions involved a challenge to CBIC Circular No. 150/06/2021-GST.

The company said it is evaluating the judgment and assessing the next steps in consultation with legal advisors. No settlement details were indicated, and the company’s disclosure suggests the matter is still being assessed for legal remedies.

Supreme Court context: Section 74 notices must explain “fraud” basis

On August 19, 2026, the Supreme Court quashed a GST show cause notice dated June 13, 2025 issued to G.R. Infra Projects Limited for FY 2018-19 under Section 74 of the CGST Act read with the state GST Act. The demand in that matter was about ₹1.52 crore.

The Court held that the extended limitation under Section 74 cannot be invoked by mechanically using expressions such as “fraud”, “wilful misstatement” or “suppression of facts” without setting out foundational facts in the notice itself. The Bench of Justices J.B. Pardiwala and K. Vinod Chandran observed that the allegations supporting fraud or suppression should emanate from the notice, and cannot be supplied later through a counter-affidavit. The Court set aside the Madhya Pradesh High Court order and the impugned SCN, directing that no further proceedings be taken pursuant to it.

Key facts at a glance

Market impact and what investors typically track

The immediate market relevance of an SCN is typically linked to the size of the proposed demand, the legal route available, and whether cash outflow becomes likely in the near term. In this case, the company has stated it does not expect a material financial impact at present, and the notice is not a final order.

At the same time, the company’s disclosures show multiple GST-related touchpoints across jurisdictions and issues, including annuity-related GST for a subsidiary and scrutiny around reconciliations such as e-way bills versus returns. Investors generally track timelines for replies to DRC-01 notices, any adjudication orders that may follow, and whether matters move to appellate forums.

What to watch next

The next step in the Madhya Pradesh matter is the company’s response to the Form GST DRC-01 notice. Any subsequent adjudication would depend on the department’s assessment after reviewing the response.

In the subsidiary’s Rajasthan matter, the company has said it is evaluating the High Court judgment with legal advisors, which may clarify whether further legal remedies are pursued. Separately, the Supreme Court’s August 19, 2026 decision underscores that Section 74 notices are expected to clearly set out the factual basis for serious allegations, a point that may remain relevant in how future proceedings are contested and assessed.