Protean e-gov technologies Limited has disclosed receiving an Order-in-Appeal from the Commissioner (Appeals-II) of CGST & Central Excise, Mumbai, concerning a significant tax demand related to alleged excess Input Tax Credit (ITC) availment. The company made this disclosure under Regulation 30 of SEBI Listing Regulations on March 13, 2026.

Order Details and Financial Impact

The Order-in-Appeal pertains to the period from April 2020 to March 2021 and addresses the company's appeal filed on May 28, 2025. The tax authorities have raised substantial financial demands against the company for alleged GST compliance issues.

Nature of Alleged Violations

The tax demand stems from alleged excess availment of Input Tax Credit in GSTR 3B returns compared to the ITC available in GSTR 2A returns. The authorities have imposed the demand under Section 73 of the CGST Act, which deals with recovery of tax not paid or short paid or erroneously refunded.

The order includes multiple components of financial liability:

• Tax Demand: ₹6.28 crore for alleged excess ITC availment
• Interest: Applicable rates under Section 50 of CGST Act, 2017 and Maharashtra GST Act, 2017
• Penalty: ₹62.80 lakh under Section 73(9) of CGST Act and related provisions

Company's Response and Impact Assessment

Protean eGov Technologies has indicated that it is evaluating all available options, including filing an appeal against the current order. The company has assessed that it does not anticipate any material impact on its financials, operations, or other business activities from this development.

The disclosure was made in compliance with SEBI regulations, specifically under Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has provided detailed information as required under SEBI Circular dated July 13, 2023.

Regulatory Compliance

The company has fulfilled its disclosure obligations by informing both BSE Limited and National Stock Exchange of India Limited about this development. This transparency ensures that investors and stakeholders are kept informed about significant regulatory matters that could potentially affect the company's operations or financial position.

Protean eGov Technologies Limited has successfully obtained regulatory approval for its composite scheme of arrangement, marking a significant corporate restructuring milestone. The company received the certified copy of the National Company Law Tribunal (NCLT) order on March 10, 2026, following the tribunal's decision on February 27, 2026.

NCLT Approval Details

The NCLT Mumbai Bench sanctioned the composite scheme of arrangement between Protean Infosec Services Limited (demerged company) and Protean eGov Technologies Limited (resulting company) under Sections 230 to 232 of the Companies Act, 2013. The tribunal's order establishes the appointed date as April 1, 2025, for the demerger transaction.

Business Demerger Structure

The scheme provides for the demerger of specific business verticals from Protean Infosec Services Limited into Protean eGov Technologies Limited on a going concern basis. Protean Infosec Services is a wholly-owned subsidiary of the resulting company, which eliminates the need for share issuance as consideration for the transfer.

The demerged undertaking encompasses:

• Governance, Risk & Compliance: Implementation of ISO27001, ISO22301, PCI-DSS, regulatory requirements, compliance, IT-related certifications, information security posture, cyber security compliance, data privacy framework implementation, and digital risk management
• Managed SOC Services: 24x7 SOC monitoring services including SIEM, SOAR, UEBA technologies
• Security Architecture Review: Comprehensive security risk assessment with vulnerability assessment, penetration testing, source code review, API security testing, red teaming, and cyber awareness (VAPT)

Strategic Rationale

The tribunal noted the strategic benefits of the demerger arrangement. The resulting company operates in developing digital public infrastructure and citizen-centric e-governance solutions for citizens, corporates, and the government. The demerger aims to:

• Consolidate operations within the resulting company
• Execute services in a cost-efficient manner for long-term value creation
• Pool resources and expertise of both entities
• Aggregate and synergize engineering capabilities across the group

Regulatory Compliance

The NCLT order addresses various compliance requirements, including income tax provisions under Section 2(19AA) of the Income Tax Act, 1961. The tribunal confirmed that meetings of equity shareholders and creditors were dispensed with, given the holding-subsidiary relationship between the companies.

Implementation Timeline

The scheme becomes effective from the appointed date of April 1, 2025, but remains operative from the effective date when the certified copy is filed with the Registrar of Companies. The companies must complete various post-approval formalities within specified timeframes, including filing with the ROC within 30 days and stamp duty adjudication within 60 days.

The demerger represents a strategic consolidation move for Protean eGov Technologies, bringing specialized cybersecurity and compliance capabilities under the listed entity's direct operations while maintaining operational continuity for all transferred business segments.