Eureka Forbes has received a rectification order from Uttar Pradesh GST authorities reducing its alleged tax liability for FY23 from ₹273.40 crore to ₹4.50 crore. This significant reduction follows the company's initial show cause notice received in September 2026.

The rectification order was issued under Section 161 of the Uttar Pradesh Goods and Services Tax Act, 2017, by the Deputy Commissioner, State Tax, Sector-1, Lucknow. It revises the earlier notice dated September 25, 2026, which had been disclosed on September 28, 2026. The new order was received on October 1, 2026.

Revised Liability Breakdown

The regulatory filing details the specific components of the disputed amount after rectification. The authority has significantly lowered the base tax, interest, and penalty claims compared to the original notice.

Company's Continued Legal Stance

Despite the reduction, Eureka Forbes stated that the proposed demand in the rectified notice still appears to have been computed using pan-India level financial information from its signed financials for FY23. The company argued that this approach failed to establish corresponding transaction-level liability attributable specifically to its Uttar Pradesh GST registration.

The management maintains that the rectified notice is also not sustainable in law or procedure. Consequently, the company plans to contest the matter comprehensively within prescribed timelines. Eureka Forbes does not envisage any material impact on its financials, operations, or other activities arising from this development.

What the Numbers Show

The rectification order drastically alters the scale of the dispute. The total alleged liability has fallen by approximately 98%, dropping from ₹273.40 crore to ₹4.50 crore. In the original notice, interest and penalties constituted nearly 45% of the total claim. In the revised order, these non-tax components account for roughly 29% of the total (₹1.31 crore out of ₹4.50 crore), indicating a shift where the principal tax assessment remains the dominant factor in the reduced claim.

Lunolux Limited has pledged an additional 22,319,748 equity shares of Eureka Forbes Limited , increasing the total encumbered stake to 51.00% of the issued and paid-up share capital.

The creation of this subsequent pledge occurred on September 15, 2026, through the depository system. Catalyst Trusteeship Limited disclosed the transaction on September 17, 2026, acting as the onshore security agent for lenders under a restated facility agreement with Lunolux.

Pledge Details and Encumbrance

The new pledge covers 11.53% of the target company's issued and paid-up share capital. This addition follows earlier encumbrances created by Lunolux:

• Initial Pledge: 64,950,000 shares (disclosed May 9, 2024)
• Top-Up Pledge: 11,418,729 shares (disclosed July 30, 2026)

Catalyst Trusteeship Limited holds these shares as pledgee for the benefit of overseas banks and eligible lenders, in compliance with Reserve Bank of India guidelines. The trustee clarified it holds no beneficial interest in the pledged shares.

Facility Restatement Context

The pledge was created pursuant to an amendment and restatement agreement dated September 15, 2026, between Lunolux and CSCGlobal Capital Markets (Singapore) Pte. Ltd. This agreement modified the original facility dated May 1, 2024, to extend the tenor and increase the total commitment.

What the Numbers Show

The cumulative pledge of 98,688,477 shares represents more than half of Eureka Forbes' voting power. With the diluted encumbrance standing at 47.34%, the promoter group's collateral exposure remains significant relative to the company's total equity base of 19,35,06,816 shares.