CRISIL , a leading credit rating agency, has been slapped with a substantial penalty by Chennai tax authorities, raising questions about the classification of its export services under the Goods and Services Tax (GST) regime.

Penalty Details

The State Tax Officer of the Mandaveli Assessment Circle has imposed a penalty of ₹7.95 crore on CRISIL under Section 74 of the Central Goods and Services Tax (CGST) Act. This penalty stems from GST assessment issues related to the export of services during the financial year 2020-21.

Regulatory Disclosure

In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, CRISIL has officially disclosed the details of the assessment order to the stock exchanges. The company received the order on July 26, as per the disclosure dated July 27.

Nature of the Violation

The penalty has been levied under Section 74 of the CGST Act, which typically applies to cases involving alleged tax evasion or misclassification. It's worth noting that under Indian GST law, the export of services is generally treated as zero-rated, subject to compliance with certain conditions.

Company's Stance

CRISIL has stated that it does not expect any material impact on its operations, financial performance, or business continuity due to this penalty. However, the company has announced its intention to contest the order by filing an appeal against the demand raised.

Implications and Next Steps

While the penalty amount is significant, CRISIL's decision to appeal suggests that the company believes it has grounds to challenge the tax authority's assessment. The case highlights the complexities surrounding the classification of export services under the GST framework and may have implications for other companies in similar situations.

As this matter unfolds, stakeholders will be watching closely to see how it might impact CRISIL's financial position and whether it could lead to broader discussions about GST regulations for export services in India's financial sector.

CRISIL Limited , a leading global analytics company, has announced robust financial results for the second quarter of fiscal year 2025, demonstrating resilience and growth amid global economic uncertainties.

Financial Highlights

CRISIL's consolidated performance for Q2 FY2025 showed significant improvement across key metrics:

• Income from operations increased by 5.7% to Rs 843.00 crore, up from Rs 797.40 crore in Q2 FY2024.
• Profit after tax (PAT) rose by 14.3% to Rs 171.60 crore, compared to Rs 150.10 crore in Q2 of the previous year.
• Profit before tax (PBT) increased by 8.2% to Rs 225.00 crore from Rs 208.00 crore in Q2 FY2024.

For the first half of FY2025, CRISIL reported:

• A 7.9% increase in income from operations to Rs 1,656.20 crore
• A 15.1% rise in profit after tax to Rs 331.40 crore
• A 12.1% growth in profit before tax to Rs 452.20 crore

Dividend Announcement

The Board of Directors has declared an interim dividend of Rs 9 per share for Q2 FY2025, compared to Rs 8 per share in the same quarter last year, underlining the company's commitment to delivering value to its shareholders.

Segment Performance

CRISIL's two main business segments both contributed to the overall growth:

CRISIL Ratings

Revenue grew by 18% in Q2 2025, driven by leadership in corporate bond ratings and growth in bank loan ratings.

Research, Analytics, and Solutions

Revenue increased by 1.3% year-on-year, demonstrating resilience despite curtailed discretionary spending by global clients.

Strategic Initiatives

CRISIL continues to make strategic investments in technology and talent while expanding its global presence across multiple business verticals. These initiatives are aimed at enhancing the company's capabilities and market position.

Market Response

The strong financial results reflect CRISIL's ability to navigate through challenging global economic conditions while maintaining growth across its key business segments.

Conclusion

CRISIL's robust Q2 FY2025 performance, coupled with strategic initiatives to optimize its operations, positions the company well for continued growth. The management's focus on leveraging technology and domain expertise appears to be paying off in a challenging global economic environment. The increased interim dividend further demonstrates the company's financial strength and commitment to shareholder value.