JSW Dulux Limited received a Show Cause Notice from the Karnataka GST Department on August 5, 2026, demanding ₹118.33 crore in connection with the disallowance of Input Tax Credit (ITC) for the period from April 2020 to March 2021. The notice, issued under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017, poses a significant potential liability for the listed entity as it challenges the company's tax compliance for the fiscal year 2021. The total demand includes principal tax, interest, and penalty components, requiring immediate management attention and disclosure under SEBI regulations.

The notice was issued by the Assistant Commissioner of the Bengaluru jurisdiction of the Karnataka GST Department following a GST scrutiny. Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and Circular no. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/120 dated July 13, 2023, JSW Dulux disclosed the litigation pendency to the Bombay Stock Exchange and the National Stock Exchange of India Ltd. The filing was signed by Rajiv L. Jha, General Counsel and Company Secretary, on August 5, 2026.

The financial implications of the notice are substantial, with the total liability standing at ₹118,33,32,869. This amount is structured across three distinct categories: tax, interest, and penalty. The breakdown of the demand is detailed below.

The core of the dispute lies in the disallowance of Input Tax Credit claimed by the company during the April 2020 to March 2021 period. The Karnataka GST Department has scrutinized these claims and determined them ineligible, leading to the aggregate demand. The inclusion of both interest and penalty amounts equal to roughly half of the total demand each highlights the severity of the regulatory position taken by the department.

Management Response and Next Steps

JSW Dulux has stated that the Show Cause Notice is open for further submissions before the relevant authorities. The company is currently in the process of responding to the notice within the stipulated time frame mentioned in the document. As this is an initial stage of the litigation process, the final outcome remains uncertain pending the company's defense and subsequent adjudication by the tax authorities.

JSW Dulux has received a Show Cause Notice from the Delhi GST Department alleging a liability of ₹52,68,358 due to the disallowance of Input Tax Credit (ITC). The notice, issued under Section 74 of the CGST Act/Rules, 2017, was received by the company on August 5, 2026, at 9:00 am. This regulatory action highlights potential compliance risks related to ITC claims over a four-year period, requiring management to allocate resources for legal defense and potential cash outflows if the disallowance is upheld.

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Circular no. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/120 dated July 13, 2023. Rajiv L. Jha, General Counsel and Company Secretary, signed the intimation submitted to the BSE and NSE on August 5, 2026.

Breakdown of Alleged Liability

The total quantum of claims mentioned in the notice amounts to ₹52,68,358. The breakdown of this liability is as follows:

The dispute originates from a GST Scrutiny conducted by the Superintendent, Delhi West, Delhi GST Department. The scrutiny focused on the period from April 2020 to March 2024. The core allegation is the disallowance of Input Tax Credit claimed by the company during these fiscal years.

Management Response and Next Steps

The company stated that the notice is open for further submissions before the relevant authorities. JSW Dulux is in the process of responding within the stipulated time frame mentioned in the notice. No financial provision has been disclosed in relation to this specific notice, as the outcome remains pending further submissions and adjudication.

What the Numbers Show

The alleged liability of ₹52.68 lakhs is primarily driven by the tax component of ₹52.22 lakhs, which constitutes over 99% of the total claimed amount. The interest component of ₹46,254 is negligible in comparison, suggesting that the primary contention is the validity of the credit claims rather than delayed payments. Since the penalty is listed as "as applicable," the final financial impact could increase depending on the authority's determination of intent or negligence regarding the ITC disallowance.