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TeamLease Services Limited disclosed on October 13, 2026 that it received a Karnataka GST show-cause notice dated September 29, 2026 for April 2022–March 2023. The notice proposes ₹52,76,08,537 in tax, interest and penalty. It is a show-cause proceeding under Section 73(1) of the Karnataka Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017—not a final adjudicated liability.
What the TeamLease GST notice covers
The notice was issued by the Deputy Commissioner of Commercial Taxes (Large Taxpayers Unit)-03, Bengaluru. TeamLease said nine issues had appeared in an earlier Form GST DRC-01A intimation. After the company made submissions, the proper officer dropped seven of them. The September notice addresses the two issues that remained, according to the company’s exchange disclosure.
The figures below are amounts proposed in the notice and reported by TeamLease. They should not be read as a final assessment, confirmed demand or court finding.
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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →| Component | Amount proposed | Qualification |
|---|---|---|
| Tax | ₹28,91,89,566 | Proposed in the show-cause notice |
| Interest | ₹20,95,00,014 | Calculated through the notice date; subject to change |
| Penalty | ₹2,89,18,957 | Proposed in the show-cause notice |
| Total | ₹52,76,08,537 | Aggregate proposed amount, not a final adjudicated liability |
The two remaining issues
1. Turnover adjustment reported in GSTR-9C
The notice proposes 18% tax on turnover adjustments of ₹42,47,67,225 reported in Table 5O of GSTR-9C. TeamLease’s disclosure lists the corresponding proposed tax as ₹7,64,58,100 and says the notice proceeded on the stated ground that no response had been submitted for this item.
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2. Difference in exempt, nil-rated or non-GST outward supplies
The second issue concerns a reported difference of ₹81,86,92,852 between the amount in GSTR-3B and the amount in Table 7(b) of GSTR-9C. The filing separately refers to exempt supplies of ₹18,15,74,312 for which documentary evidence was said to be absent. The notice proposes tax on the relevant amounts.
TeamLease says the tax on the ₹18,15,74,312 item was calculated at 18% each under CGST and SGST rather than 9% each. On the company’s calculation, that treatment overstates the demand by ₹3,26,83,376. This is TeamLease’s stated position in its disclosure, not an independently adjudicated conclusion.
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What happens next
TeamLease stated that it was evaluating the notice and intended to submit its reply in Form GST DRC-06 by October 29, 2026. The October 13 filing does not establish that the reply was filed, nor does it report a later adjudication, appeal or court ruling.
A DRC-06 reply is the company’s formal response to the show-cause proceedings. The eventual amount, if any, can differ from the notice because the department may accept explanations or evidence, revise calculations, or confirm only part of the proposed tax, interest and penalty. No later outcome is established in the disclosed material.
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Why the exchange disclosure was late
TeamLease reported that its intimation to the exchanges was 13 days late. The company attributed the delay to an inadvertent communication gap between its indirect-tax and secretarial functions, which meant the notice was not escalated to the secretarial function within the prescribed timeline. It said internal reporting had been strengthened.
How this differs from older GST disclosures
TeamLease’s FY2022-23 consolidated financial statements recorded ₹232.36 lakh under GST matters as of March 31, 2023. That historical figure included amounts paid under protest for certain customer-disputed GST demands through that date and other notices involving mismatches or pending reconciliations for various years.
The ₹232.36 lakh disclosure predates the September 2026 Karnataka notice and should not be added to, substituted for, or treated as a component of the newly proposed ₹52,76,08,537. The two disclosures refer to different reporting points and matters.
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How to interpret the ₹52.76 crore figure
- It is a quantified proposal in a show-cause notice, not proof that TeamLease ultimately owes the full amount.
- The total combines tax, interest and penalty; interest was calculated through the notice date and can change.
- The notice concerns FY2022-23, with the company identifying two remaining issues after seven earlier issues were dropped.
- TeamLease has disputed at least part of the calculation, including the rate applied to the ₹18,15,74,312 exempt-supplies item.
- The public disclosure available for this report does not establish what happened after the planned October 29, 2026 DRC-06 response.
Bottom line for readers tracking the case
As of TeamLease’s October 13, 2026 disclosure, the company faced a proposed Karnataka GST demand of ₹52.76 crore for FY2022-23, comprising ₹28.92 crore tax, ₹20.95 crore interest and ₹2.89 crore penalty. The case remained at the show-cause stage, and the company was preparing its DRC-06 response. Any confirmed liability or appeal outcome would require a later authoritative filing or order.
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