Carraro India Limited, a leading manufacturer of tractor and agricultural machinery components, has informed the stock exchanges on 18th September 2025 that it has received a Show Cause Notice (SCN) from the Office of the Commissioner of Customs (NS-V), Jawaharlal Nehru Customs House, Nhava Sheva, Taluka – Uran, Dist. Raigad. The SCN, signed on 1st September 2025, relates to a dispute regarding the Integrated Goods & Services Tax (IGST) classification applied by the company on certain imported goods.

Details of the Show Cause Notice

The Customs Officer has alleged that certain imported goods should have been subject to IGST at 28% (residual entry), instead of the 18% IGST rate applied by the company, which pertains to specified parts of tractors. Consequently, the SCN demands a tax short levy of Rs. 15,24,59,511, along with applicable interest and penalties under Section 124 read with Section 28 of the Customs Act, 1962.

The SCN, identified with DIN 20250978NX000000AIFD, was officially received by the company on 17th September 2025 at 02:55 p.m.

Company Response and Legal Position

Carraro India, based on legal advice and past precedents on similar issues, plans to file a response to the SCN within 30 days from receipt, addressing the classification dispute. The company believes that it is entitled to favourable relief from the Customs authorities regarding the alleged short levy of IGST.

Impact on Business Operations

The SCN, while significant in monetary terms, does not have an immediate impact on the financial, operational, or other activities of the company. Carraro India has clarified that it will comply with all regulatory requirements and respond to the authority within the stipulated timeframe.

Regulatory Compliance

This disclosure is made under Regulation 30 read with Clause 8 of Para B of Part A of Schedule III of SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, ensuring full transparency and timely communication with investors and stakeholders. The company has also provided the relevant details in Annexure A, including the authority involved, nature of action, SCN details, date of receipt, alleged violations, and impact assessment.

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