Birla Corporation disclosed on August 12, 2026, that its wholly owned material subsidiary, RCCPL Private Limited (RCCPL), has received a demand cum show cause notice from the Joint Commissioner, Central Goods & Service Tax (CGST) & Central Excise, Nagpur-I Commissionerate. The notice pertains to an alleged excess availment of Input Tax Credit (ITC) involving an amount of ₹10,30,06,338, along with an equivalent penalty and applicable interest, for the financial years 2020-21 and 2022-23.

The disclosure was made pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with SEBI Master Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026. The company received the intimation on August 11, 2026, at approximately 12:57 p.m. (IST).

Details of the Notice

The show cause notice was issued under Section 74(1) of the Central Goods and Services Tax Act, 2017, and the Maharashtra Goods and Services Tax Act, 2017, read with Section 20 of the Integrated Goods and Services Tax Act, 2017. The authorities allege wrongful availment of ITC in contravention of Section 16(2) of the CGST Act, 2017. The allegation is based on a negative balance reflected in Table 8D of GSTR-9 for the specified financial years.

Company Response and Impact

Birla Corporation stated that the notice has no impact on the financial position, operations, or other activities of RCCPL. The company maintains that the notice lacks merit and is not maintainable, as it is based merely on the differential Input Tax Credit reflected in Table 8D of GSTR-9.

RCCPL has received a favorable order in a similar matter previously. The subsidiary is currently in the process of submitting its reply within the prescribed time period. Manoj Kumar Mehta, Company Secretary & Legal Head of Birla Corporation, signed the disclosure.

Birla Corporation Limited shareholders approved a ₹12.50 per share final dividend for FY26 and adopted audited financial statements at its 106th Annual General Meeting held on August 1, 2026, but the reappointment of Chairman Harsh V. Lodha faced significant opposition from the promoter group, highlighting governance friction within the MP Birla Group. The meeting, conducted in compliance with Section 108 of the Companies Act, 2013 and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, saw 888 members present in person or through proxy out of 90,103 shareholders on the record date.

While resolutions regarding the dividend, financial statements, and cost auditor remuneration passed with overwhelming support exceeding 98%, the reappointment of Harsh V. Lodha as Director retiring by rotation received only 79.17% overall support. Notably, the Promoter and Promoter Group voted against his reappointment in 64.31% of e-voting cases, though they supported it unanimously during physical polling. This divergence suggests internal disagreement or strategic positioning among controlling shareholders, even as public institutions backed the move with 99.27% support.

Voting Breakdown by Resolution

The consolidated scrutinizer’s report filed with BSE Limited and National Stock Exchange of India Limited on August 3, 2026, details the voting patterns across all four ordinary resolutions. Anil Kumar Murarka of A Murarka & Co served as the independent Scrutinizer for the process.

Governance and Procedural Notes

The Board ratified the remuneration of M/s. Shome & Banerjee, Cost Accountants (Firm Registration No. 000001), at ₹5,00,000 for FY27. The Statutory Auditors’ Report contained no qualifications. During the remote e-voting period from July 29 to July 31, 2026, the Scrutinizer blocked the credentials of seven shareholders—including August Agents Limited, Insilco Agents Limited, Laneseda Agents Limited, Hindustan Medical Institution, Eastern India Educational Institution, Belle Vue Clinic, and M.P. Institute of Fundamental Research—following requests to prevent unauthorized voting attempts. These entities later voted via ballot papers at the physical meeting, and their votes were counted.

What the Numbers Show

The stark contrast between the unanimous support for financial and dividend resolutions versus the nearly 26% opposition to Harsh V. Lodha’s reappointment signals potential leadership challenges within the promoter circle. While public institutional investors remained firmly aligned with management, the promoter group’s split vote—particularly the heavy e-voting opposition—suggests underlying disagreements not reflected in operational metrics. For minority shareholders, this dissent warrants monitoring in future governance disclosures, as it may influence board dynamics and strategic direction despite the clean audit outcome and consistent dividend policy.