Finolex Cables Limited, a leading player in the cable manufacturing industry, has disclosed a significant update regarding a tax demand imposed by the GST Commissioner. As per the company’s filing under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Finolex Cables has received an order from the Commissioner (Appeals) GST & Central Excise (Appeals-I) on November 30, 2024, regarding a tax demand of ₹5,25,822.

This order follows an earlier dispute, where the company's appeal against a decision by the Additional Commissioner of GST & Central Excise, Chennai, was rejected. The appeal stemmed from discrepancies related to the Input Tax Credit (ITC) reversal and short payment of GST under the reverse charge mechanism.

Nature of the Tax Demand

The tax demand issued by the Commissioner pertains to short reversal of Input Tax Credit and short payment of GST under the reverse charge mechanism, as identified during earlier audits. The company's appeal against the earlier order by the Additional Commissioner was dismissed, resulting in this order.

Options for Finolex Cables

The company now has the option to file an appeal with the Goods and Service Tax Appellate Tribunal (GSTAT). The tribunal will hear the matter if the company chooses to challenge the order further. The company is actively evaluating its legal options in response to the tax demand.

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Financial Impact

As per the disclosure, the monetary impact of the tax demand is ₹5,25,822. This amount will be payable only if the final adjudication of the case goes against the company. However, the company has indicated that, to date, there is no substantial operational or financial impact other than the disputed demand.

It is important to note that this tax dispute is unlikely to have a significant effect on the overall operations of Finolex Cables Limited, given its strong market presence and financial standing. However, the outcome of the appeal process could influence future compliance measures.

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