CG Power & Industrial Solutions has received an updated stay order from the Income Tax Department regarding its ongoing tax demand dispute, requiring additional payments to maintain protection against the substantial assessment.

Updated Stay Order Details

The company received a revised stay order dated 29th January, 2026 from the Income Tax Department concerning the balance amount of its tax demand case. The updated order mandates specific payment terms and conditions for continued stay protection.

Background of Tax Demand Case

The tax dispute originated from a Final Assessment Order for Assessment Year 2021-22, which the company received on 25th July, 2025. The original demand and subsequent legal proceedings have followed a structured timeline.

Original Stay Order Terms

The initial stay order granted on 22nd August, 2025 established the foundation for the current proceedings. Under the original terms, the company was required to pay 20% of the total tax demand as a condition for the stay.

Original Payment Structure:

• Initial payment requirement: Rs. 42 crores
• Payment method: Five instalments
• Stay coverage: Until ITAT appeal disposal
• Additional conditions: Subject to refund adjustments

Current Payment Obligations

The updated stay order reflects adjustments made after determining the actual tax refund amount. The revised payment structure accounts for the refund adjustment that was finalized subsequent to the original order.

Key Financial Adjustments:

• The additional payment of Rs. 28,13,23,489 represents the balance amount after accounting for tax refund adjustments
• The tax refund was determined at Rs. 23,41,95,879 as per the original order dated 22nd August, 2025
• The new payment schedule requires completion in three instalments instead of the original five

Legal Proceedings Status

The company's appeal against the Final Assessment Order remains pending before the Income Tax Appellate Tribunal, Mumbai. The appeal challenges the additions and disallowances made in the assessment order that resulted in the substantial tax demand.

Current Legal Position:

• Appeal filed on 8th August, 2025 before ITAT Mumbai
• Stay applications accepted by Deputy Commissioner of Income Tax
• Updated stay order ensures continued protection during appeal process
• No settlement proceedings currently applicable

The company has made the requisite disclosures under Regulation 30 of the SEBI Listing Regulations and relevant SEBI Master Circular requirements, ensuring transparency with stakeholders regarding this significant tax matter.

CG Power & Industrial Solutions is making significant progress in its electric vehicle initiatives and infrastructure expansion projects, with key milestones approaching completion across multiple business segments.

EV Motor and Controller Development

The company has reached advanced stages in securing regulatory approvals for its electric vehicle motor and controller systems. With the approval process nearing completion, CG Power is preparing to initiate passenger trials within the next 4-5 weeks, marking a crucial step in the validation and commercialization of its electric mobility solutions.

Switchgear Expansion Progress

CG Power's brownfield switchgear expansion project is approaching completion, representing a significant capacity enhancement for the company's traditional power infrastructure business. This expansion is strategically positioned to capitalize on growing demand in the electrical equipment sector.

Business Development Impact

The simultaneous progress in both electric vehicle technology development and switchgear capacity expansion demonstrates CG Power's dual-track approach to growth. The EV motor and controller initiative positions the company in the emerging electric mobility market, while the switchgear expansion strengthens its established power infrastructure business.

The anticipated INR 400 crores in additional revenue from the switchgear expansion represents a substantial contribution to the company's revenue base, while the upcoming passenger trials for EV components mark a significant milestone in product validation and potential market entry.

Strategic Positioning

These developments reflect CG Power's strategic focus on diversifying its product portfolio while strengthening core competencies. The company's progress in electric vehicle components aligns with India's push toward electric mobility, while the switchgear expansion supports the growing power infrastructure requirements across various sectors.