On December 24, 2024, Birla Corporation Limited (Scrip Code: 500335, Scrip Symbol: BIRLACORPN) filed a significant update under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding a Show Cause Notice (SCN) it received on August 2, 2024. The notice was related to the availing of ineligible Input Tax Credit (ITC) under the Rajasthan Goods and Services Tax (RGST) and Central Goods and Services Tax (CGST) Act, 2017 for the period between July 2017 and March 2018. The total amount involved was ₹1,69,05,602, including tax (₹52,33,933), interest (₹64,37,736), and penalty (₹52,33,933).

The company had filed a reply to the SCN, defending its position before the Deputy Commissioner, Circle Chittorgarh, Bhilwara, Rajasthan. The Deputy Commissioner issued an order on December 23, 2024, which brought favorable news for Birla Corporation. The order dropped all proceedings initiated by the SCN and set aside the entire demand of tax, interest, and penalty.

Key Details of the Order

• The Deputy Commissioner’s order has dropped the entire demand related to the ineligible ITC and set aside the penalty and interest of ₹1,69,05,602.
• The tax proceedings initiated by the Show Cause Notice dated August 2, 2024, have been completely dropped.
• The order was received by the company on December 23, 2024, at 12:52 PM (IST), and was promptly shared with the BSE and NSE for disclosure.
• The impact on the company’s financial position and operations is null, as the entire tax demand, interest, and penalty have been set aside by the Deputy Commissioner.

Legal and Financial Implications

The dismissal of the demand means that Birla Corporation does not need to bear the financial burden of the ₹1.69 crore demand, which was related to the ITC availed during FY 2017-18. Given the magnitude of the sum, this outcome is favorable for the company and will have no adverse financial impact moving forward.

The dropping of the tax proceedings also means that Birla Corporation has been absolved of the legal complications related to this matter. It signifies the company’s compliance with tax regulations and its ability to successfully contest legal and regulatory issues when needed.

Corporate Governance and Transparency

This disclosure is in line with the company’s commitment to corporate transparency and compliance with SEBI regulations. As per SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123, the company has included all the necessary details in the disclosure, which are also available on the company’s official website: Birla Corporation.

The public filing of the update ensures that shareholders, investors, and regulatory authorities are kept informed of the developments, which reflect Birla Corporation's proactive approach to managing legal and tax-related challenges.

Looking Ahead

With the order dropping the demand, Birla Corporation is expected to maintain its strong financial position and continue its operations without the need to account for the contested tax liabilities. This also demonstrates the company’s ability to resolve regulatory matters efficiently while adhering to compliance standards.

The company’s stock performance, which remains unaffected by the legal challenge, is likely to continue reflecting investor confidence. For more corporate updates and tax developments, stay tuned to Birla Corporation’s official communication channels and the stock exchanges.

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