Megastar Foods faces department appeal over ₹6.23 Cr tax demand

Megastar Foods Ltd has received a communication from the Office of the Commissioner (Appeals), Ludhiana, regarding a department appeal challenging the vacating of a tax demand of ₹6.23 Cr. The company, which is the respondent in this matter, stated that the communication provides it an opportunity to file a counter reply. This development follows an earlier disclosure submitted under Regulation 30 of the SEBI LODR Regulations.

The filing details two distinct appeals currently before the Commissioner (Appeals). The first involves the department appealing against the dropping of a demand amounting to ₹6,22,93,620. Concurrently, Megastar Foods has filed its own appeal against the confirmation of a separate demand of ₹1,82,82,724, which includes related interest and penalty.

Appeal Details

The specifics of the regulatory communication and the corresponding appeals are outlined below:

S. No.	Particulars	Details
1.	Authority	Office of the Commissioner (Appeals), Central Goods & Services Tax Appeals Commissionerate, Ludhiana
2.	Department Appeal	Against the vacating/dropping of the demand of ₹6,22,93,620
3.	Company Appeal	Against the confirmation of demand of ₹1,82,82,724 along with related interest and penalty
4.	Date of Communication	June 29, 2026

Financial Impact

Megastar Foods clarified that there is no immediate financial or operational impact resulting from these proceedings. The company noted that the actual financial and operational consequences can only be assessed after the Commissioner (Appeals) passes an order on the matter. The disclosure was signed by Vikas Goel, Managing Director, on June 30, 2026.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-6.03%	-7.04%	+6.20%	+53.68%	+27.58%	+204.67%

Megastar Foods has secured a 100% exemption from electricity duty for a period of 15 years from the Punjab government, effective from the date of commercial production following its expansion. The incentive, communicated via an addendum to the Eligibility Certificate issued by the Department of Industries & Commerce, Punjab, Chandigarh, is valid from November 18, 2024, or up to 100% of the Fixed Capital Investment (FCI) of ₹8867.86 lakhs, whichever is earlier. This exemption is granted under clause 10.1(iv), (v) of the DSOG-2018 issued under the Industrial and Business Development Policy-2017 (IBDP-2017). The intimation was submitted to the exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Key Incentive Details

The company is also eligible to receive incentives amounting to ₹881.86 Crores, subject to specific terms and conditions outlined by the authority. The notification reference number cited is CC/Addl.Dir./Industrial & Business Development /2017/1369 dated October 17, 2017. The following table summarizes the key details of the incentive received:

S. No.	Particulars	Details
1.	Name of the authority	Department of Industries & Commerce, Punjab, Chandigarh
2.	Nature of action	Addendum to Eligibility Certificate granting 100% exemption from electricity duty for 15 years from 18.11.2024 or up to 100% of FCI of ₹8867.86 lakhs, whichever is earlier
3.	Total incentives eligible	₹881.86 Crores
4.	Date of receipt	15.06.2026
5.	Financial impact	Expected reduction in operating costs and improved profitability

Financial Impact

Management stated that the electricity duty exemption will directly contribute to a reduction in operating costs over the exemption period. Consequently, this measure is anticipated to improve the overall profitability of the company during the specified timeframe. The intimation was signed by Vikas Goel, Managing Director of Megastar Foods Limited, and disseminated to BSE Limited and the National Stock Exchange of India Limited on June 15, 2026.