Kansai Nerolac Paints Limited has disclosed an order passed by the Assistant Commissioner, Central GST & CEX, imposing a penalty of ₹66,70,686. This demand has arisen due to the partial disallowance of Input Tax Credit claimed by the company for FY 2020-21 to 2023-24. Kansai Nerolac states that the order is based on a wrong understanding of facts and that it possesses records to prove its claims. The company is currently in the process of filing an appeal. Despite this, the company maintains that there is no material impact on its financials, operations, or other activities.
Tax Penalty Imposed on Kansai Nerolac
Kansai Nerolac Paints Limited has announced a penalty amounting to ₹66,70,686. This order was issued by the Assistant Commissioner, Central GST & CEX, Division II, Raipur, under Section 74 of the CGST Act, 2017. The penalty pertains to the fiscal years spanning 2020-21 to 2023-24.
Reason for Penalty and Company’s Stance
The tax demand has primarily originated from the State of Chhattisgarh due to the partial disallowance of Input Tax Credit that the company had claimed. Kansai Nerolac asserts that the order has been passed based on an incorrect interpretation of the facts and that the company holds adequate records to substantiate its claims. Consequently, the company is actively preparing to file an appeal against this order.
Impact on Business Operations
The company has clarified that the imposition of this penalty is not expected to have any material impact on its financial position, operational activities, or any other aspects of the listed entity. Kansai Nerolac is taking steps to address the matter through the appellate process.
Source: BSE
