SRF Ltd witnessed significant institutional trading activity on the National Stock Exchange (NSE) with a substantial block trade transaction. The large-scale trade reflects notable market interest in the chemical sector company's shares.

Block Trade Details

The transaction executed on NSE involved considerable volume and value, demonstrating institutional investor participation in the stock.

Market Significance

Block trades represent large-volume transactions typically executed by institutional investors, mutual funds, or other significant market participants. These transactions are conducted outside the regular market to avoid impacting the stock's market price during execution. The substantial value of ₹15.47 crores indicates meaningful institutional activity in SRF's stock.

The execution price of ₹3090.80 per share provides insight into the valuation at which institutional investors are willing to transact in the company's shares. Such block trades often signal portfolio rebalancing, strategic investment decisions, or position adjustments by large investors in the chemical sector.

SRF Limited has received a significant tax demand notice from GST authorities, with the order received on December 29. The chemical company faces a demand of ₹15.76 crores from the Joint Commissioner, CGST Commissionerate, Dehradun, along with applicable interest and penalties.

Nature of Tax Demand

The CGST authorities have raised the demand for Input Tax Credit (ITC) reversal on two specific grounds. The primary issue relates to a slump sale of a business unit that was reported as an exempted supply, with tax authorities taking the view that ITC reversal is required in proportion to such exempted supply. Additionally, the authorities have demanded ITC reversal due to alleged non-filing of returns by suppliers.

Key Violations Alleged

The tax authorities have identified specific contraventions in their demand notice. The company had undertaken a slump sale of a business unit, which was reported as an exempted supply under GST regulations. The authorities have taken the position that proportionate ITC reversal is mandatory for such exempted supplies. The second violation relates to supplier-related compliance issues, where authorities have sought ITC reversal from the company due to alleged non-filing of returns by suppliers.

Company's Response and Market Impact

SRF's management has expressed confidence in challenging the demand based on legal advice received. The company believes the demand lacks legal merit and has indicated its intention to contest the matter before appropriate legal forums. The management does not expect any material impact on its financial, operational or other activities at this stage.

Financial Implications

The total financial exposure includes the principal demand amount of ₹15.76 crores, along with applicable interest charges and penalties equivalent to the tax amount. However, the company's management remains optimistic about successfully defending against the demand through legal proceedings. This regulatory disclosure was made pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.