JSW Dulux Limited has received a demand order of ₹42.04 crore from the Karnataka GST Department regarding input tax credit disallowances for the fiscal year 2021.

The order, dated October 15, 2026, and received by the company on October 19, 2026, relates to the period from April 2020 to March 2021. This development follows a show cause notice issued earlier in August 2026, which had aggregated to a higher figure. The company is currently preparing its response to the relevant authorities within the stipulated timeframe.

Breakdown of the Demand

The final demand order issued by the Assistant Commissioner of Commercial Taxes, LGSTO LTU, Bengaluru, specifies the following components:

Context of the Dispute

The dispute centers on the disallowance of Input Tax Credit (ITC) under Section 74 of the CGST/SGST Act, 2017. Initially, on August 5, 2026, the Karnataka GST Department had issued a show cause notice demanding a total of ₹118.33 crore. That initial demand comprised:

• Tax: ₹40.08 crore
• Interest: ₹38.17 crore
• Penalty: ₹40.06 crore

The company submitted its response with supporting documents within the given time limit. The subsequent review by the tax authorities resulted in the revised order of ₹42.04 crore.

What the Numbers Show

A comparison between the initial show cause notice and the final demand order reveals a significant reduction in the financial liability imposed on JSW Dulux. The total demand decreased from ₹118.33 crore to ₹42.04 crore, representing a reduction of approximately 64%.

Notably, the penalty component saw the most substantial adjustment, dropping from ₹40.06 crore in the notice to ₹14.06 crore in the final order. Similarly, the tax principal was reduced from ₹40.08 crore to ₹14.06 crore. This suggests that the department accepted certain arguments or documentation provided by the company, leading to a partial reversal of the initial claims.

JSW Dulux Ltd received an appeal order from the Madhya Pradesh GST Department annulling a demand of ₹77.13 lakh. The order, received on October 13, 2026, sets the previously disputed tax and penalty liability to nil.

The dispute originated from a demand order issued on August 28, 2024, under Section 73 of the CGST/SGST Act, 2017. This initial order related to the period from July 2022 to March 2023 and disallowed Input Tax Credit (ITC). The total demand comprised a tax amount of ₹70.12 lakh and a penalty of ₹7.01 lakh. Interest on the said amount was stated as nil in the original order.

Following the issuance of the demand, the company filed an appeal within the stipulated time limit, submitting supporting documents to challenge the disallowance. The Commissioner of Appeals reviewed the case and issued the final appeal order on October 8, 2026.

Resolution of Litigation

The resolution marks the conclusion of this specific litigation matter for the company. The key financial details of the dispute and its resolution are outlined below:

The company disclosed this update pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure follows earlier updates regarding pending litigation, including a previous disclosure made on August 29, 2024.

What the Numbers Show

The annulment of the demand eliminates a contingent liability of ₹77.13 lakh that had been disclosed in prior filings. Since the interest component was explicitly stated as nil in the original demand order, the total cash outflow avoided is limited strictly to the principal tax and penalty amounts. The reversal of both the tax component (₹70.12 lakh) and the penalty (₹7.01 lakh) indicates a complete victory on the merits of the Input Tax Credit claim for the specified period.