NewsKansai Nerolac Paints Receives GST Penalty Orders Worth Rs. 2.99 Crore for Multiple Assessment YearsKansai Nerolac Paints Receives GST Penalty Orders Worth Rs. 2.99 Crore for Multiple Assessment Years
Kansai Nerolac Paints Limited disclosed GST penalty orders totaling Rs. 2.99 crore for assessment years 2017-18 and 2019-20, with the larger penalty of Rs. 2,78,89,642 relating to transitional Input Tax Credit disallowance in Maharashtra and Rs. 20,49,698 for partial ITC disallowance in Haryana. The company maintains there is no material financial impact and plans to appeal both orders before appropriate authorities.
*this image is generated using AI for illustrative purposes only.
Kansai nerolac paints Limited has received GST penalty orders totaling Rs. 2.99 crore from tax authorities for two separate assessment years, the company disclosed in a regulatory filing dated 30th March, 2026. The penalties were imposed under Section 74 of the Central Goods and Services Tax Act, 2017, relating to Input Tax Credit (ITC) disallowances.
Assessment Year 2017-18 Penalty Details
The more significant penalty pertains to assessment year 2017-18, where the Commissioner Appeals II, CGST & Central Excise, Mumbai confirmed a penalty of Rs. 2,78,89,642. This penalty stems from the disallowance of transitional Input Tax Credit claimed by the company during FY 2017-18 for its Maharashtra operations.
| Parameter: | Details |
|---|---|
| Authority: | Commissioner Appeals II, CGST & Central Excise, Mumbai |
| Penalty Amount: | Rs. 2,78,89,642 |
| Assessment Year: | 2017-18 |
| State: | Maharashtra |
| Issue: | Disallowance of transitional Input Tax Credit |
| Date Received: | 30th March, 2026 |
Assessment Year 2019-20 Penalty Details
For assessment year 2019-20, the Deputy Commissioner, CGST Division-West, CGST Faridabad imposed a penalty of Rs. 20,49,698. This penalty arose from partial disallowance of Input Tax Credit claimed by the company during FY 2019-20 for its Haryana operations.
| Parameter: | Details |
|---|---|
| Authority: | Deputy Commissioner, CGST Division-West, CGST Faridabad |
| Penalty Amount: | Rs. 20,49,698 |
| Assessment Year: | 2019-20 |
| State: | Haryana |
| Issue: | Partial disallowance of Input Tax Credit |
| Date Received: | 30th March, 2026 |
Company's Response and Legal Strategy
Kansai Nerolac Paints has indicated it possesses relevant records and legal precedence to support its claims in both cases. The company plans to file appeals against both orders:
- For the 2017-18 case: Appeal to be filed before the GST Tribunal
- For the 2019-20 case: Appeal to be filed against the Deputy Commissioner's order
Financial Impact Assessment
Despite the substantial penalty amounts, the company has stated that there is no material impact on its financials, operations, or other activities. This disclosure was made pursuant to SEBI regulations requiring listed entities to inform exchanges about significant regulatory actions.
The disclosure was made under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and relevant SEBI circulars dated November 11, 2024, and December 31, 2024.
Historical Stock Returns for Kansai Nerolac Paints
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +4.99% | +10.37% | -13.73% | -29.03% | -26.18% | -55.46% |
Will the ongoing GST appeals process impact Kansai Nerolac's ability to claim Input Tax Credits in future quarters?
How might this GST penalty precedent affect other paint manufacturers' transitional credit claims from the 2017-18 period?
Could these penalty orders signal stricter GST enforcement trends that may impact Kansai Nerolac's compliance costs going forward?
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