TeamLease Services receives a GST show cause notice with a ₹52.76 crore demand for FY2022-23

TeamLease Services Limited has told the exchanges that on 29 Sep 2026 it received a Show Cause Notice (SCN) from the Deputy Commissioner of Commercial Taxes (Large Taxpayers Unit)-03, Bengaluru, under Section 73(1) of the Karnataka and Central GST Acts, for the period April 2022 to March 2023.

The notice quantifies the demand at ₹52,76,08,537, or ₹52.76 crore: tax of ₹28.92 crore, interest of ₹20.95 crore and a penalty of ₹2.89 crore. Of nine issues raised in an earlier intimation, seven were dropped by the officer based on the company's submissions, and the notice covers two: adjustments to turnover of ₹42.47 crore reported in the annual return reconciliation, and an alleged under-reporting of exempt supplies. Tax on both is proposed at 18%.

The company says that, in its view, the tax on the exempt supplies has been computed at 18% each under CGST and SGST instead of 9% each, overstating the demand by ₹3.27 crore. It is evaluating the notice and will file its reply on or before 29 Oct 2026. The disclosure was made 13 days late because of a gap in internal communication between the indirect tax and secretarial functions, and the company says it has strengthened its internal reporting process.

Inference

A show cause notice is a step before a decision: it states the department's case and gives the company a chance to reply. The ₹52.76 crore is a proposed demand, not a confirmed liability, and the interest was computed only up to the date of the notice and may change.

The company's reply is due by 29 Oct 2026, and the outcome of the process is not known. Shareholders may want to follow any later disclosure on the reply and the order, and on whether the company makes a provision for the amount in its accounts.