Sterling & Wilson Renewable Energy , a prominent player in the renewable energy sector, has received a significant reduction in its tax liability from the South African Revenue Service (SARS). The company's tax demand in South Africa has been substantially decreased from 40.24 crore rupees to 9.59 crore rupees, marking a 76% reduction.

Tax Demand Revision

According to a regulatory filing by Sterling & Wilson on September 19, SARS has issued a withdrawal notice for a part of the earlier tax demand. The initial tax demand stood at 80.47 million South African Rand (approximately 40.24 crore rupees). Following the revision, the new tax demand has been set at about 18.90 million South African Rand, equivalent to approximately 9.59 crore rupees.

Financial Impact

This substantial reduction in tax liability represents a positive development for Sterling & Wilson Renewable Energy. The revised figure signifies a decrease of about 30.65 crore rupees from the original demand, which could potentially have a favorable impact on the company's financial position.

Regulatory Compliance

The company made this disclosure in compliance with Regulation 30 read with Para B of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This update follows an earlier disclosure made by the company on September 3 regarding the same matter.

Company Background

Sterling & Wilson Renewable Energy, headquartered in Mumbai, operates in the renewable energy sector, focusing on solar energy solutions.

This development underscores the importance of tax-related matters in international operations and their potential impact on a company's financial outlook. Shareholders and investors of Sterling & Wilson Renewable Energy are likely to view this significant reduction in tax liability as a positive development for the company's operations in South Africa.

Sterling & Wilson Renewable Energy Limited (SWRE) has received significant relief in its ongoing tax dispute with the Kenya Revenue Authority (KRA). The company announced that the tax demand for the period from January 1, 2020, to December 31, 2023, has been substantially reduced following a recent order from the Commissioner of Legal and Board Services Department, Tax Dispute Resolution Department.

Substantial Tax Demand Reduction

The latest development shows a marked improvement in SWRE's tax position in Kenya. The KRA has issued a revised order dated December 12, 2025, significantly reducing the company's tax liability.

Key Factors Behind the Reduction

According to the company's regulatory filing, the primary reason for the tax demand reduction is the lower attribution of profits to SWRE's Kenya Branch. This adjustment has led to a corresponding reduction in both corporate tax and withholding tax implications. However, the demand related to VAT and PAYE (Pay As You Earn) remains unchanged from the earlier order dated September 17, 2025.

Company's Current Position

SWRE has stated that it is currently in the process of evaluating the contents of the revised order and deciding on the future course of action. This measured approach suggests the company is carefully assessing its options before determining whether to accept the reduced demand or pursue further appeals.

Regulatory Compliance and Disclosure

The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Chief Financial Officer Ajit Pratap Singh certified the information as true, correct, and complete to the best of his knowledge and belief. The company has referenced its earlier disclosure dated September 18, 2025, maintaining transparency with stakeholders throughout the process.

Financial Impact and Outlook

The substantial reduction of ₹24.60 crore in the tax demand represents a positive development for SWRE's financial position. This relief could potentially improve the company's cash flow and reduce the financial burden related to its Kenya operations. The resolution of this matter will be closely watched by investors and stakeholders as it impacts the company's operational efficiency in the East African market.