Dodla Dairy Limited has successfully overturned a GST demand through a favorable ruling from the Appellate Authority at the Office of the Commissioner of Customs & Central Tax Appeals - II Hyderabad Commissionerate. This ruling, issued on January 24, 2025 and received on January 30, 2025, relates to a GST dispute regarding the classification of flavored milk under the Goods and Services Tax (GST) framework.

Initially, Dodla Dairy was faced with a GST demand of ₹3.09 Crores for the period from July 2017 to October 2021, based on the flavored milk being classified under GST Tariff Heading No. 2202 9930, which attracted a 6% CGST and 6% SGST (or 12% IGST). This led to an additional tax liability of ₹3.09 Crores, along with a penalty of an equal amount, plus applicable interest. The company had paid the ₹3.09 Crores under protest while challenging the demand.

On November 20, 2023, Dodla Dairy filed an appeal, contesting the demand order, and after careful review, the Appellate Authority ruled that flavored milk should fall under Tariff Heading No. 0402 9990, which attracts a much lower tax rate of 2.5% CGST and 2.5% SGST (or 5% IGST). This ruling has resulted in the Appellate Authority setting aside the demand, as well as the penalties and interest initially imposed.

As a result, Dodla Dairy is now in the process of claiming a refund of the ₹3.09 Crores it paid earlier, as per the order passed by the Appellate Authority.

Key Details of the Legal Update:

• Authority Involved: The ruling came from the Office of the Commissioner of Customs & Central Tax Appeals - II Hyderabad Commissionerate.
• Nature of the Action: The Appellate Authority set aside the original demand order and directed a refund of the taxes paid by Dodla Dairy.
• Date of Receipt: The company received the ruling on January 30, 2025.
• Impact on the Company: The refund of ₹3.09 Crores is a positive development for the company, improving its financial position and rectifying the overpayment issue.

This decision is significant not only for Dodla Dairy but also for the broader dairy and food processing industry, which must remain vigilant about GST classifications and potential challenges. The company’s timely appeal and eventual success highlight the importance of thorough legal processes and proper classification to avoid unwarranted penalties and excess tax payments.

Regulatory and Compliance Information:

In line with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Dodla Dairy has shared this crucial development with the stock exchanges. The company is complying with the necessary disclosure requirements and ensuring transparency with its stakeholders.

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