CRISIL Limited, a leading global analytics company, has announced the incorporation of a new step-down subsidiary named 'Crisil Canada Inc' in Canada. This development comes after receiving approval from the Board of Directors of Crisil Irevna UK Limited, an existing subsidiary of CRISIL Limited.

Key Details of the New Subsidiary

• Name: Crisil Canada Inc
• Location: Canada
• Ownership: 100% owned by Crisil Irevna UK Limited
• Industry Focus: Research, Benchmarking, Pricing Analytics solutions, Advisory Services, Consulting, Risk services & solutions, Data Analytics and allied services

Strategic Implications

The establishment of Crisil Canada Inc is expected to complement CRISIL's existing portfolio of products and expand its offerings to new markets and client segments. This move aligns with the company's strategy to strengthen its global presence and enhance its service capabilities.

Regulatory Compliance

CRISIL has made the necessary disclosures under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has informed both the BSE Limited and the National Stock Exchange of India Ltd. about this development.

Timeline and Approvals

• The Board of Directors of Crisil Irevna UK Limited approved the incorporation.
• Crisil Canada Inc was officially incorporated following intimation from regulatory authorities.
• The entire process, from approval to incorporation, was completed within the stipulated timeframe of three months.

Financial Aspects

While specific financial details have not been disclosed, Crisil Irevna UK Limited will be paying cash consideration towards the subscription of 100% shareholding in Crisil Canada Inc.

This strategic move by CRISIL underscores the company's commitment to expanding its global footprint and enhancing its service offerings in the analytics and risk solutions sector. The establishment of Crisil Canada Inc is expected to create new opportunities for the company in the North American market.

CRISIL , a leading credit rating agency, has been slapped with a substantial penalty by Chennai tax authorities, raising questions about the classification of its export services under the Goods and Services Tax (GST) regime.

Penalty Details

The State Tax Officer of the Mandaveli Assessment Circle has imposed a penalty of ₹7.95 crore on CRISIL under Section 74 of the Central Goods and Services Tax (CGST) Act. This penalty stems from GST assessment issues related to the export of services during the financial year 2020-21.

Regulatory Disclosure

In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, CRISIL has officially disclosed the details of the assessment order to the stock exchanges. The company received the order on July 26, as per the disclosure dated July 27.

Nature of the Violation

The penalty has been levied under Section 74 of the CGST Act, which typically applies to cases involving alleged tax evasion or misclassification. It's worth noting that under Indian GST law, the export of services is generally treated as zero-rated, subject to compliance with certain conditions.

Company's Stance

CRISIL has stated that it does not expect any material impact on its operations, financial performance, or business continuity due to this penalty. However, the company has announced its intention to contest the order by filing an appeal against the demand raised.

Implications and Next Steps

While the penalty amount is significant, CRISIL's decision to appeal suggests that the company believes it has grounds to challenge the tax authority's assessment. The case highlights the complexities surrounding the classification of export services under the GST framework and may have implications for other companies in similar situations.

As this matter unfolds, stakeholders will be watching closely to see how it might impact CRISIL's financial position and whether it could lead to broader discussions about GST regulations for export services in India's financial sector.