The Madras High Court has set aside a ₹353.18 crore tax demand raised against Indian Railway Finance Corporation Ltd , providing significant relief from a major contingent liability. The court's order, dated July 27, 2026, and received by the company on July 29, 2026, quashes the recovery notice issued by the Assistant Commissioner (State Tax), Chennai. The dispute centred on Input Tax Credit (ITC) that was available in GSTR 2A but remained unclaimed by the company, which tax authorities deemed lapsed. By setting aside the impugned order, the judiciary has effectively neutralised the immediate financial impact of this ₹353.18 crore claim, preserving the company's balance sheet strength and cash flow outlook.

Legal Proceedings and Court Order

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Para B of Part A of Schedule III. The Madras High Court directed that the matter be remanded for reconsideration after providing a reasonable opportunity to the petitioner, including a personal hearing. The court mandated that a fresh order must be issued within three months from the date of receipt of the copy of this order. This procedural reset ensures that the company has a formal avenue to present its case regarding the eligibility and timing of the ITC claims before any further action is taken.

Key Details of the Dispute

The nature of the dispute involves complex interpretations of GST laws regarding the lapse of input tax credit when not claimed within statutory timelines despite appearing in the recipient's GSTR 2A. The company had previously challenged the validity of the demand, arguing for the legitimacy of its position on these credits. The court's decision to remit the matter rather than dismiss it outright indicates that the substantive arguments will be heard afresh, but the immediate threat of recovery is lifted.

Financial Impact

The removal of this ₹353.18 crore contingent liability is material for Indian Railway Finance Corporation Ltd's risk profile. Contingent liabilities of this magnitude can affect credit ratings and investor perception if left unresolved or if there is a risk of sudden enforcement. By securing a judicial stay on the recovery notice, the company avoids potential cash outflows that could have impacted its liquidity. The remand period of three months provides a defined window for resolution, allowing management to prepare a robust defence with the benefit of a personal hearing.

Regulatory Compliance

The company submitted this disclosure to both the National Stock Exchange of India Limited and BSE Limited on July 30, 2026. The filing was authorised by Vijay Babulal Shirode, Company Secretary & Compliance Officer, ensuring adherence to SEBI Circular No. SEBI/HO/49/14/14(7)2025-CFD-POD2/1/3762/2026 dated January 30, 2026. There are no settlements, compensation payments, or penalties associated with this specific development at this stage, as the matter remains pending reconsideration.

Indian Railway Finance Corporation Limited ( IRFC ) will host a conference call with analysts and investors on Friday, July 31, 2026, at 11:00 AM IST. The primary objective of the meeting is to discuss the company's unaudited financial results for the first quarter of FY27. This event provides stakeholders with a direct channel to management for clarifications on the latest financial performance and operational updates.

The announcement was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. The notice, dated July 23, 2026, was issued by Vijay Babulal Shirode, Company Secretary and Compliance Officer. The proceedings are subject to change in case of exigencies.

Key Participants

Senior leadership from IRFC is scheduled to address questions during the call. The speaker lineup includes:

• Manoj Kumar Dubey, Chairman and MD & CEO
• Dr. Ranjay Choudhary, Director (Finance)
• Deepa Kotnis, Executive Director (Finance) & CFO

PhillipCapital (India) Private Limited has been appointed as the call leader. Puneet Chaturvedi from PhillipCapital India will facilitate the session.

Conference Call Details

Participants can join the conference call via various international dial-in numbers provided by PhillipCapital. The event will also be accessible through an express join link using a DiamondPass code, which allows entry without wait times.

PhillipCapital stated that the proceedings will be recorded. The list and full details of participants will be shared with the corporate entity. All necessary disclosures on stock exchanges, including call invite intimation, recording details, and call transcripts, are expected to be complied with by the respective corporate as per regulatory guidelines.