Dabur India , a leading FMCG company, saw its shares gain momentum after announcing a significant reduction in its tax demand order. The company's stock traded 0.7% higher at ₹518.50, recovering 1.7% from the day's low, as investors reacted positively to the news.

Tax Demand Reduction

The company revealed that its tax demand order has been reduced to ₹271.70 crore from the earlier ₹320.61 crore. This reduction comes following orders received from the jurisdictional Assistant Commissioner, in compliance with remand directions issued by the CGST Appeals Commissionerate, Chandigarh.

Details of the Order

According to the LODR (Listing Obligations and Disclosure Requirements) filing by Dabur India:

• The jurisdictional offices have confirmed a tax demand of ₹271,69,94,127, down from the earlier demand of ₹320,60,53,069.
• The order also includes applicable interest and a penalty equal to the tax demand (₹271,69,94,127).
• The company received the order on September 23 at 12:32 PM.

Company's Response

Dabur India stated that it is seeking legal opinion on the matter and will take appropriate steps available under applicable laws. This includes the possibility of filing an appeal with the tribunal. The company assured stakeholders that there would be no impact on its operations or other activities due to this order.

Financial Impact

The financial impact of this development will be limited to the extent of the final tax liability as determined by higher forums, along with interest and penalty. Dabur emphasized that the impact on its operations would be minimal.

Stock Performance

The reduction in tax demand has been well-received by the market:

This positive movement aligns with the broader recovery seen in the FMCG sector, which includes peers like Hindustan Unilever (HUL), Britannia, and Godrej Consumer Products.

Investors and analysts will be closely watching for further developments, particularly any appeals or legal actions Dabur may take regarding the tax demand. The company's ability to navigate this regulatory challenge while maintaining its operational performance will likely be a key focus for stakeholders in the coming months.

A senior executive from Dabur India Ltd , a leading FMCG company, has expressed optimism about the potential impact of the upcoming GST 2.0 implementation on consumer demand and consumption patterns in India.

GST 2.0: A Catalyst for Growth

The Dabur executive believes that the revised Goods and Services Tax framework, commonly referred to as GST 2.0, could serve as a significant driver for increased market demand and overall consumption. This perspective suggests that the updated tax structure might create a more favorable environment for businesses in the fast-moving consumer goods (FMCG) sector.

Anticipated Benefits

While specific details of the GST 2.0 framework were not provided, the executive's statement implies that the changes could potentially:

• Simplify tax compliance procedures
• Reduce operational costs for businesses
• Lead to more competitive pricing for consumers
• Stimulate overall economic activity in the FMCG sector

Industry Implications

The positive outlook from a major player like Dabur could indicate broader industry expectations regarding the impact of GST 2.0. If these anticipations materialize, it could mean:

• Increased consumer spending power
• Potential growth in sales volumes for FMCG companies
• Improved business performance across the sector

Cautious Optimism

It's important to note that while the Dabur executive's view is optimistic, the actual impact of GST 2.0 will depend on its final structure and implementation. Stakeholders across the industry will be closely watching for further details and analyzing potential outcomes as more information becomes available.

As the GST 2.0 rollout approaches, companies like Dabur may be positioning themselves to capitalize on the anticipated boost in consumer demand and consumption. The coming months will be crucial in determining how these expectations align with the actual market response to the updated tax framework.