Delhivery Faces ₹49.2 Crore GST Demand Order and Dissolves Bangladesh Subsidiary

Delhivery Limited , a prominent logistics and supply chain services company, has recently faced significant operational changes and regulatory challenges. The company has received a substantial GST demand order and has also dissolved its subsidiary in Bangladesh.

GST Demand Order

Delhivery has received a significant GST demand order from the Joint Commissioner, CGST Commissionerate, Faridabad. The order, which amounts to ₹49.20 crore, stems from disputes over tax rate interpretations on certain services provided by the company.

Details of the Demand Order

The demand order, issued under Section 74 of the CGST Act, 2017, includes the following key points:

Aspect	Details
Demand Amount	₹49,19,76,037
Additional Charges	Applicable interest and 100% penalty
Period Covered	FY 2018-19 to 2022-23 (up to July 2022)
Reason	Short payment or non-payment of GST due to tax rate interpretation issues
Scope	Services across various registrations of the company

Company's Response and Outlook

Delhivery has taken proactive steps to address this issue:

Industry Forum Engagement: The company raised the matter before the GST Council through an Industry Forum, seeking clarification on the applicable tax rate.
Positive Outlook: Based on its assessment and prevailing law, Delhivery is optimistic about a favorable outcome at higher forums.
Financial Impact: The company does not anticipate any material financial impact from this demand order.

Dissolution of Bangladesh Subsidiary

In a separate development, Delhivery has dissolved its subsidiary, Delhivery Bangladesh Logistics. The company has ceased operations of its Bangladesh-based unit. This move appears to be part of the company's strategic realignment of its international operations.

Regulatory Disclosure

In compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Delhivery has officially disclosed these developments to the stock exchanges.

Broader Implications

These recent events highlight the dynamic nature of the logistics industry and the challenges companies face in both regulatory compliance and international operations:

The GST demand order underscores the ongoing challenges in interpreting GST regulations, particularly in the logistics sector. It emphasizes the importance of clear tax guidelines and the need for companies to maintain open dialogues with tax authorities to resolve such disputes.
The dissolution of the Bangladesh subsidiary reflects the complexities of managing international operations and the need for companies to continually assess and adjust their global strategies.

As these matters progress, they will be closely watched by industry observers and could potentially set precedents for similar cases in the future. For now, Delhivery maintains its focus on its core operations while addressing these challenges.

Investors and stakeholders are advised to monitor further updates from the company regarding the resolution of the tax dispute and any potential impacts from the closure of its Bangladesh operations.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+2.67%	+1.90%	+4.81%	+58.63%	+37.14%	-9.60%

Delhivery Limited has announced a significant employee stock option grant and revealed impressive performance metrics for the recent festive season. These developments underscore the company's commitment to employee retention and its robust operational capabilities.

Stock Option Grant

The Nomination and Remuneration Committee of Delhivery has approved the grant of 274,450 stock options to eligible employees under the Delhivery Employees Stock Option Plan IV, 2021 (ESOP IV 2021). Key details of the grant include:

Aspect	Details
Number of Options	274,450
Conversion Ratio	1 option : 1 equity share
Face Value	Re. 1 per share
Exercise Price	Re. 1 per share
Vesting Schedule	10% after 12 months
	30% after 24 months
	60% at 15% every 6 months thereafter
Total Vesting Period	4 years
Exercise Period	From respective vesting dates until continued employment

The equity shares allotted upon exercise will not be subject to any lock-in period and will rank equally with existing equity shares.

Festive Season Performance

Delhivery has also released an infographic highlighting its performance during Phase 2 of the Festive Season in October. The company demonstrated its operational prowess with several notable achievements:

Metric	Achievement
Goods Value Shipped	₹187.4 Crore+
Single Day Shipments	7.2 Million+
Total Shipments Processed	107.4 Million+
Packages Delivered within 24 hours	13.59 Million+
Packages Delivered within 48 hours	29.57 Million+
Fastest Delivery	2 Minutes (in Bengaluru)
Network Coverage	4,085 Kms (Thiruvananthapuram to Tezu)
Clients Served	18,121

These figures underscore Delhivery's extensive reach and efficiency in handling high volumes during peak seasons, showcasing its robust logistics infrastructure across India.

The stock option grant aligns with Delhivery's strategy to incentivize and retain talent, while the festive season performance demonstrates the company's operational capabilities in meeting high consumer demand. These developments may be of interest to investors and industry observers tracking the growth of India's logistics sector.