Crompton Greaves Consumer Electricals Limited has received a tax demand notice of ₹29.91 crore from the Income Tax Department for the Assessment Year 2023-24. The notice was issued under Section 156 of the Income Tax Act, 1961, following an assessment order under Section 143(3) read with Section 144B, dated March 24, 2025. The demand includes ₹24.59 crore in tax liabilities and ₹5.32 crore in interest.

Reasons for the Tax Demand

The Income Tax Department has raised this demand due to the following disallowances:

• Disallowance of ESOP (Employee Stock Ownership Plan) expenses

• Disallowance of provisions against warranty and after-sales service expenses

• Disallowance of depreciation on intangible assets

The company received the notice on March 24, 2025, at 4:48 PM and is currently assessing its next steps.

Company's Response and Appeal Process

Crompton Greaves has assessed the situation with legal consultants and expects a favorable outcome at the Appellate level. The company intends to file an appeal before the National Faceless Appeal Centre (NFAC) within the prescribed timeline under Section 249 of the Income Tax Act.

Additionally, the company will be required to deposit 20% of the disputed tax amount, which equals ₹5.98 crore, at the time of filing the appeal. The company is also considering filing a stay application with the Income Tax Department to defer the payment.

Impact on Financials

The estimated financial impact of the demand is around ₹22 crore. However, the company maintains that it has strong grounds for appeal and believes the demand will be overturned or reduced significantly at the Appellate level.

Regulatory Compliance & SEBI Disclosure

This disclosure is made in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company remains committed to transparency and regulatory compliance and will provide further updates as the matter progresses.

Conclusion

While this tax demand presents a temporary financial obligation, Crompton Greaves remains confident in its position. Investors and stakeholders are advised to await further updates as the appeal process unfolds. The company assures that it is taking all necessary steps to resolve the matter efficiently.

Stay tuned for more updates as the situation develops.

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