Akzo Nobel India Limited has received a favorable outcome in its GST litigation matter, with the Maharashtra GST Department completely dropping a significant tax demand. The company informed stock exchanges on January 8, 2026, about the resolution of the pending litigation that was initially disclosed on October 10, 2025.

GST Demand Details and Timeline

The litigation began when Akzo Nobel India received a show cause notice from the Maharashtra GST Department on October 9, 2025. The notice pertained to the period from April 2021 to March 2022 and involved disallowance of Input Service Distributor (ISD) input tax credit under section 73 of the CGST/SGST Act, 2017.

Company Response and Resolution

The company responded to the show cause notice within the stipulated time limit, providing comprehensive supporting documents to substantiate its position. The Deputy Commissioner of State Tax, Belapur, Maharashtra GST (ISD) Department reviewed the company's response and supporting documentation.

Following this review, the Deputy Commissioner issued an order dated December 26, 2025, which the company received on January 7, 2026, at 2:00 PM. The order brought complete relief to Akzo Nobel India, as it dropped the entire tax demand.

Order Outcome

The final order delivered a comprehensive resolution in favor of the company:

• Complete tax demand waiver: The entire amount of ₹3,94,59,459 has been dropped
• Interest waiver: All applicable interest charges have been waived
• Penalty waiver: All applicable penalties have been dropped
• Original order annulment: The original demand order stands completely annulled

Regulatory Compliance

Akzo Nobel India has fulfilled its disclosure obligations under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company also complied with SEBI circular SEBI/HO/CFD/CFDPoD-1/P/CIR/2023/123 dated July 13, 2023, by providing this update on the pending litigation.

The resolution of this GST matter eliminates a significant contingent liability for the company and provides clarity on its tax position for the specified period. The favorable outcome demonstrates the effectiveness of the company's documentation and compliance processes in defending its tax positions.

Akzo Nobel India Limited has received a significantly reduced GST demand order from the Karnataka GST Department, marking substantial relief in an ongoing tax dispute for financial year 2018-19. The paints and coatings maker disclosed this development through a regulatory filing on January 1, providing an update on litigation proceedings under SEBI regulations.

Massive GST Demand Reduction

The Karnataka GST Department's final order shows a dramatic reduction in the demanded amount compared to the initial notice. The comparison reveals the extent of relief obtained by the company:

Background of the Tax Dispute

The tax dispute originated from a show cause notice issued by the Karnataka GST Department on June 27, 2025. The notice pertained to the disallowance of input tax credit under Section 74 of the CGST/SGST Act, 2017, covering the period from April 2018 to March 2019. The initial demand aggregated to ₹176.65 crores, representing a substantial financial exposure for the company.

Company's Response and Resolution

Akzo Nobel India had submitted its response along with supporting documents within the stipulated time limit following the show cause notice. The Assistant Commissioner of Commercial Taxes, LGSTO LTU, Large Taxpayers Unit, Bengaluru reviewed the company's submissions before issuing the final order dated December 30, 2025.

The company received this order on January 1, 2026. The substantial reduction from the initial demand of over ₹176 crores to approximately ₹41 lakhs indicates that the company's response and supporting documentation were largely successful in addressing the department's concerns.

Current Status and Next Steps

The company clarified that the order remains open for further submissions to the relevant authorities, and it is in the process of responding within the indicated timeframe. This suggests that Akzo Nobel India may seek further relief or clarification on the reduced demand.

The company confirmed that the matter does not involve litigation against key management personnel, promoters, or any ultimate person in control, and there has been no settlement of the proceedings as of this date. The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency with stakeholders regarding material litigation updates.

Market Impact

Shares of Akzo Nobel India ended at ₹3,180.00, down by ₹2.70, or 0.08%, on the BSE following the announcement.