Larsen & Toubro (L&T), the prominent Indian construction and engineering giant, is facing the imposition of two penalties by Qatar’s income tax authorities. The penalties amount to Rs 111.31 crore and Rs 127.64 crore, totaling Rs 238.9 crore, and are attributed to alleged discrepancies in the income declared by L&T compared to the assessment made by the Qatari authorities. This information was disclosed by L&T in a stock exchange filing on Friday.
The penalties pertain to the tax assessment periods from April 2016 to March 2017 and April 2017 to March 2018. In response, L&T has filed an appeal against the imposition of these penalties, asserting that they are arbitrary and unjustified.
Despite the challenges, L&T expressed confidence in a favorable outcome at the appellate level and emphasized that no material adverse impact is anticipated on the company’s financial, operational, or other activities.
The Gulf region holds significant importance for L&T, constituting 41% of its order inflow during the first half of the current financial year (April-September). These orders represent 32% of L&T’s Rs 4,50,700 crore order book as of the end of September.
As L&T navigates through this tax penalty situation, the company remains a key player in the Gulf market, where it has established a substantial presence in its order portfolio.