Vedanta hit with a Rs 146 crore tax penalty
Visakhapatnam tax official imposes fine of INR 146 crores on Vedanta company
Mining and energy powerhouse Vedanta is facing a whopping Rs 146 crore penalty, following a tax order from the Principal Commissioner of Central Tax in Vishakhapatnam. The charges center around unpaid and delayed payments of Special Additional Excise Duty (SAED).
Vedanta disclosed in a recent filing that the bulk of the penalty pertains to non-payment of SAED relating to Videocon's share. Approximately Rs 115 crore of the total Rs 146 crore penalty amount bears relevance to the unpaid SAED by Videocon. Vedanta's individual share in the penalty amounts to just Rs 6.96 crore. The penalty order covers the period from July 2022 to March 2024.
As the company evaluates its next steps in handling this penalty order, it remains uncertain how this will impact its operations and financial health.
Soaring success, yet clouded by tax troubles
Vedanta showcased impressive growth in its Q4 FY25 earnings, posting a staggering 154 percent year-on-year (YoY) increase in profit, reaching a net profit of Rs 3,483 crore. The company also reported a 14 percent YoY increase in revenue for the quarter, generating Rs 40,455 crore in total.
Vedanta's revenue and Ebitda jumped by 31 percent to Rs 11,466 crore in the quarter, making a significant improvement compared to the Rs 8,768 crore recorded in the same quarter last year. The company’s Ebitda margin also improved by approximately 400 basis points to 28.3 percent, going up from 24.7 percent in the previous year.
Since there's limited information available about the background and specifics of Vedanta's tax penalty situation, further research may be necessary to understand the exact circumstances, timeline, or nature of the dispute.
What's SAED?
Special Additional Excise Duty (SAED) is a form of excise duty levied on specific goods or services in India.
The Videocon connection
Videocon is an Indian multinational conglomerate with interests in multiple sectors such as telecommunications,retail, energy, and minerals. The connection between Vedanta's tax liabilities and Videocon is not explicitly specified.
Following Vedanta's performance
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- The tax penalty of Rs 146 crore imposed on Vedanta, a mining and energy powerhouse, could impact their future business and personal finance.
- The mining sector is not the only interest for Vedanta, as they have also shown success in DEFI (Decentralized Finance) and personal-finance businesses.
- In the face of the penalty, Vedanta might consider exploring alternatives in the cryptocurrency market for investing their funds.
- The tax dispute between Vedanta and the tax officials in Vishakhapatnam focuses on the unpaid Special Additional Excise Duty (SAED) that Vedanta owes, with a significant portion owed to Videocon.
