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HYDERABAD — State-run engineering major Bharat Heavy Electricals Limited (BHEL) has received significant financial relief after the Telangana Commercial Taxes Department dropped a Goods and Services Tax demand of 207.26 crore rupees. The decision eliminates the entire tax liability alongside associated interest and penalty charges for the financial year 2022-23. The public sector undertaking confirmed that the order leaves no adverse impact on its financial stability, rendering any further legal or procedural response on the matter unnecessary.
The order was passed on November 7, 2026, by the Assistant Commissioner of State Tax within the Telangana Commercial Taxes Department, with formal communication received by the company on November 9. In an exchange filing, BHEL noted that authorities had entirely struck down the contested amount for the period. The development traces back to September 2025, when tax authorities issued show-cause notices asserting aggregate GST liabilities of 586.43 crore rupees across three consecutive fiscal cycles. The notices had allocated demands of 184.55 crore rupees for 2021-22, 207.26 crore rupees for 2022-23, and 194.62 crore rupees for 2023-24.
Resolution of Dues Across Prior Financial Periods
The latest directive resolves BHEL’s exposure for 2022-23, following a similar regulatory conclusion reached earlier for the 2021-22 cycle. In January 2026, the company reported that tax authorities had withdrawn 183.77 crore rupees out of the initial demand issued for 2021-22, accompanied by the waiver of linked interest and punitive levies.
With both matters settled, the commercial taxes department has substantially reduced the cumulative tax overhang originating from the September 2025 communications. Although the initial notice for 2021-22 carried a figure of 184.55 crore rupees against the 183.77 crore rupees formally dropped in January, filings provided no distinct explanation for the minor variance between the amounts.
Single Tax Case Remains Pending for Fiscal 2024
Out of the three financial cycles covered in the original proceedings, only the demand for 2023-24 remains actively before the tax administration. The outstanding case involves an alleged GST liability of 194.62 crore rupees, which is currently undergoing departmental adjudication.
Management indicated optimism that the remaining assessment will conclude in line with the earlier resolutions. However, until a final adjudication is entered on the record, the figure continues to stand as a pending tax matter. The elimination of the 2022-23 assessment removes a considerable potential liability from the balance sheet while administrative proceedings run their course.
Operational Expansion Drives Second-Quarter Net Profit
The regulatory relief arrives alongside a sharp acceleration in the engineering corporation’s quarterly operational performance. Second-quarter revenue rose 23.8 percent year on year to 9,300 crore rupees, advancing from 7,512 crore rupees in the corresponding period of the preceding fiscal year. Net profit more than doubled over the same timeframe, climbing from 368 crore rupees to 810 crore rupees. Operating strength carried through to earnings before interest, tax, depreciation, and amortization, which grew 77 percent to 1,026 crore rupees compared to 580 crore rupees previously.
Operational margins also expanded, with EBITDA margin improving by 330 basis points to reach 11 percent, up from 7.7 percent a year earlier. This expansion occurred despite an uptick in other expenses, which grew to 721 crore rupees from 391 crore rupees in the prior-year period. Revenue from the power division rose 16.95 percent to 6,637.9 crore rupees, while the industry segment saw a 45 percent increase to 2,662.5 crore rupees, underscoring solid business volumes across the enterprise.
