JK Paper Limited, one of India’s leading paper manufacturing companies, has informed stock exchanges about a regulatory development involving a Goods and Services Tax demand order passed by the Delhi tax authorities. The disclosure was made under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, in line with the company’s obligation to keep investors informed about material statutory and regulatory actions.

According to the disclosure dated 30 December 2025, the Assistant Commissioner of State Tax, Delhi, has passed an order under the Goods and Services Tax Act, 2017, raising a demand of ₹2,53,95,889 for the financial year 2021-22. The order was dated 29 December 2025 and was received by the company on the same day via email.

Details of the GST Demand Order

The total demand of ₹2.53 crore includes multiple components arising from the alleged excess claim of Input Tax Credit (ITC) by JK Paper Limited. As per the details shared with the stock exchanges, the demand comprises:

• Interest amounting to ₹96,36,794, and

• Penalty of ₹14,32,645,
  along with the underlying tax component.

The tax authorities have taken the view that the company claimed excess ITC during FY 2021-22, leading to the issuance of the demand order. Input Tax Credit is a critical aspect of GST compliance, allowing businesses to offset taxes paid on inputs against their output tax liability, subject to strict conditions and documentation requirements.

Company’s Stand on the Allegations

JK Paper Limited has strongly contested the basis of the order, stating that the demand is untenable and unjustified. In its regulatory filing, the company has highlighted that the Assistant Commissioner passed the order without duly considering the submissions and supporting documents furnished by the company during the course of proceedings.

The company’s position indicates that it believes it has complied with GST provisions and that the ITC claims made for FY 2021-22 are legitimate and supported by proper records. Such disputes often arise due to differing interpretations of eligibility conditions, reconciliation issues or procedural aspects under GST law.

Proposed Course of Action

JK Paper Limited has confirmed that it will take necessary action within the timelines prescribed under the Goods and Services Tax Act, 2017. This typically involves filing an appeal before the appropriate appellate authority, where the company can present its case, evidence and legal arguments against the demand order.

The appellate mechanism under GST provides taxpayers with an opportunity to seek redressal against orders passed by adjudicating authorities, and many such disputes are resolved through this process.

Impact on Financial and Operational Activities

Importantly, JK Paper Limited has clarified that it does not anticipate any material impact on its financial position, operations or other business activities as a result of the demand order. This reassurance is significant for investors and stakeholders, as it suggests that the company does not view the demand as having a meaningful effect on its ongoing business or financial stability.

In many GST disputes, especially those relating to past financial years, companies assess the likelihood of success in appeal before determining whether provisioning is required in financial statements. At this stage, JK Paper’s confidence in its submissions suggests that it expects a favourable outcome through legal remedies.

Receipt of the Order and Disclosure Compliance

The company has stated that the order was received on 29 December 2025 at 1:40 pm via email, and the disclosure to stock exchanges was made promptly thereafter. Timely disclosure of such regulatory developments is a key requirement under SEBI regulations and helps ensure transparency in the securities market.

By providing clear information on the nature of the demand, the amount involved, the authority issuing the order and the company’s response, JK Paper Limited has adhered to best practices in corporate governance and regulatory compliance.

Broader Context of ITC Disputes under GST

Disputes related to Input Tax Credit have been one of the most common areas of litigation under the GST regime. Issues such as vendor compliance, matching of returns, documentation gaps and interpretation of eligibility rules frequently lead to notices and demand orders.

For manufacturing companies like JK Paper Limited, which operate complex supply chains and procure inputs from multiple vendors, ITC compliance requires continuous monitoring and reconciliation. Increased scrutiny by tax authorities has made such disputes more visible across sectors, including paper, cement, steel and other industrial segments.

Investor and Market Perspective

From a market perspective, the size of the demand—₹2.53 crore—is relatively modest when compared to the scale of operations of JK Paper Limited. The company’s assertion that there will be no material impact, combined with its intention to challenge the order, may help mitigate concerns among investors.

Such regulatory developments are typically evaluated by investors in the context of overall compliance track record, frequency of disputes and management’s approach to risk and governance.

Conclusion

The GST demand order received by JK Paper Limited for FY 2021-22 represents a regulatory challenge that the company has chosen to contest. With a demand of ₹2.53 crore linked to an alleged excess ITC claim, the matter is now expected to move into the appellate stage.

By clearly communicating its stance, proposed legal action and expected lack of material impact, JK Paper Limited has provided clarity to stakeholders. As the appeal process unfolds, the final outcome will determine whether the demand is upheld, modified or set aside, adding another chapter to the evolving landscape of GST litigation in India’s industrial sector.

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