JSW Dulux Limited received a show cause notice from the Karnataka GST Department demanding ₹48.59 crore for alleged input tax credit disallowance. The notice, issued under Section 73 of the CGST Act, 2017, covers the period from April 2022 to March 2023.

The company disclosed the litigation on September 7, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Deputy Commissioner of the Large Taxpayers Unit in Bengaluru issued the notice following a GST scrutiny.

Breakdown of Demand

The aggregate liability comprises tax, interest, and penalty components as detailed below:

The tax component accounts for approximately 56% of the total demand, while interest constitutes nearly 39%.

Management Response

JSW Dulux stated that the show cause notice is open for further submissions before the relevant authorities. The company is preparing its response within the stipulated time frame mentioned in the notice. No financial provision has been disclosed in this filing.

What the Numbers Show

The interest component of ₹18.76 crore is substantial relative to the principal tax demand of ₹27.11 crore. This high interest burden suggests the dispute involves periods where delayed payment penalties have accumulated significantly over time, potentially impacting cash flow if the claim is upheld without adjustment.

JSW Dulux received a refund order from the Karnataka Goods and Services Tax department on September 7, 2026, effectively annulling a prior demand order. The resolution concludes litigation regarding a discrepancy in an e-way bill and invoice from December 2024.

The company had filed an appeal against a demand order issued on December 30, 2024, which cited a penalty of ₹9,89,064 under Section 129(3) of the SGST Act for FY25. The dispute centered on E-Way Bill No. 162008896389 and Invoice No. 118293 dated December 24, 2024.

Refund Order Details

The Joint Commissioner of LGSTO 38 in Bengaluru reviewed the company’s submissions and supporting documents. The authority issued a refund order dated September 5, 2026, which the company received on September 7, 2026.

The original penalty amount of ₹9,89,064 was waived entirely. Consequently, the initial demand order stands annulled.

What the Numbers Show

The complete waiver of the ₹9,89,064 penalty alongside the full tax refund indicates that the revenue authority accepted the company’s explanation regarding the documentation discrepancy. The inclusion of ₹92,349 in interest suggests the refund calculation accounts for the time lag between the original transaction date and the final settlement, ensuring no financial loss to the company from the procedural delay.