NGL Fine-Chem has received a show cause notice from the GST department proposing a total demand of ₹6.19 crore for the financial year 2022-23. The company must respond by October 22, 2026.

Notice details and demand breakdown

The Office of the Deputy Commissioner of State Tax, Mumbai, issued the notice in Form GST DRC-01 on September 22, 2026. The demand arises from scrutiny under Section 61 of the CGST/MGST Act. The total proposed demand comprises tax, interest, and penalty components.

Allegations of short payment and ITC mismatch

The notice alleges two primary contraventions regarding FY23 returns. First, the company declared outward tax liability in GSTR-1 exceeding the tax paid in GSTR-3B/GSTR-9, resulting in an alleged short payment of ₹18.31 lakh in IGST. Second, the company availed input tax credit (ITC) in GSTR-3B/GSTR-9 that was not reflected in GSTR-2A/2B, leading to an alleged excess availment of ₹2.86 crore.

The excess ITC claim is split across IGST (₹1.56 crore), CGST (₹65.21 lakh), and SGST (₹65.21 lakh). The company has been granted an opportunity for a personal hearing on October 22, 2026, and must file a detailed reply with supporting documents within the permitted time.

Company response

NGL Fine-Chem stated it has adequate grounds to substantiate its position. At this stage, the company does not anticipate any material impact on its financial, operational, or other activities arising from the notice.

NGL Fine-Chem Limited commenced commercial production of Phase II of its greenfield facility in Tarapur, Maharashtra, on September 24, 2026. This milestone completes the full commissioning of the expansion project, which involved a total investment of ₹222 crore.

The development follows the earlier commencement of Phase I on March 11, 2025. The company stated that the phased approach was designed to augment manufacturing infrastructure and support its diverse portfolio of active pharmaceutical ingredients (APIs). With both phases now operational, the facility is fully functional.

Capacity and product flexibility

NGL Fine Chem noted that aggregate installed capacity cannot be expressed as a single uniform quantity, such as tonnes per annum. This is because the company manufactures a wide variety of APIs, each requiring different manufacturing processes, batch sizes, cycle times, yields, and equipment. Consequently, actual production capacity varies significantly depending on the specific product mix and the type of API manufactured.

The new capacity addition is intended to be utilised flexibly across the company's diverse API product portfolio. Utilisation will depend on product requirements, manufacturing schedules, and available plant and equipment resources. The company will continue to disclose quantitative production or capacity information only where such data is relevant and meaningfully determinable for specific APIs or product categories.

Financing structure

The project was financed through a combination of internal accruals and external debt. The table below details the financing breakdown and key project metrics disclosed in the regulatory filing.

What the numbers show

The financing structure reveals a significant reliance on internal cash generation to fund capital expenditure. Internal accruals accounted for ₹138 crore, representing approximately 62% of the total ₹222 crore investment. In contrast, term loans from banks contributed ₹84 crore, or roughly 38% of the funding mix. This high proportion of internal funding suggests robust cash flow generation from existing operations, reducing dependency on external leverage for this expansion phase.

The filing confirms that the company operates under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The intimation regarding the commencement of commercial production has been filed with BSE and NSE, ensuring transparency for stakeholders regarding the operational status of the new infrastructure.