Flair Writing Industries Limited has announced that CGST proceedings under Section 74 for FY 2018-19 have been dropped by tax authorities, providing significant relief to the stationery manufacturer. The company received the favorable order on December 31, 2025, from the Office of the Superintendent Range-II, Division-X CGST & C.Ex., Mumbai East Commissionerate.

Background of CGST Proceedings

The company had initially received a show cause notice under Section 74 of the CGST Act, 2017, on June 30, 2025. The notice pertained to disallowed Input Tax Credit (ITC) for FY 2018-19, creating a potential financial liability for the company.

Resolution and Current Status

Following the receipt of the show cause notice, Flair Writing Industries submitted comprehensive documentation and a detailed reply to address the concerns raised by the tax authorities. The company's proactive response and supporting evidence proved effective in resolving the matter.

The dropping of proceedings represents a complete resolution of the CGST matter for FY 2018-19, eliminating the potential financial burden that the company was facing. This development demonstrates the company's ability to effectively manage regulatory compliance issues through proper documentation and timely responses.

Financial Impact Assessment

According to the company's disclosure, the dropping of CGST proceedings will have no material impact on its financial position, operations, or other business activities. This outcome allows the company to move forward without the uncertainty and potential financial liability that had been hanging over the FY 2018-19 tax matter.

Regulatory Compliance

The announcement was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure follows SEBI circulars and demonstrates the company's commitment to maintaining transparency with stakeholders regarding material developments.

This positive resolution of the CGST proceedings removes a potential overhang for Flair Writing Industries and allows the company to focus on its core business operations in the printing and stationery sector without the distraction of pending tax disputes.

Flair Writing Industries Limited's board of directors held a meeting on December 19, addressing significant corporate decisions and regulatory compliance matters. The meeting, which commenced at 4:00 PM and concluded at 4:20 PM, focused on two primary agenda items that impact the company's operational framework and governance standards.

Corporate Guarantee Approval for Step-Down Subsidiary

The board approved the issuance of a corporate guarantee for Flomaxe Stationery Private Limited, a step-down subsidiary of the company. This guarantee will facilitate credit facilities from banks and financial institutions, supporting the subsidiary's operational requirements.

Flomaxe Stationery Private Limited operates as a subsidiary of Flair Writing Equipments Private Limited (FWEPL), which is a wholly-owned subsidiary of Flair Writing Industries. FWEPL holds 51.00% of the paid-up equity share capital in Flomaxe Stationery Private Limited, establishing the step-down subsidiary relationship.

Regulatory Compliance Matter Addressed

The board also addressed correspondence from BSE Limited dated December 16, regarding a procedural delay in submitting related party transaction disclosures. The delay pertained to disclosures under Regulation 23(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the half-year ended September 30.

The delay was procedural and unintentional, caused by technical errors that prevented the disclosure from being uploaded to BSE despite timely compliance with the National Stock Exchange of India. The matter was resolved on November 7, when the disclosure was successfully resubmitted.

Governance and Compliance Framework

The board recognized the importance of maintaining strict regulatory compliance standards. Several common directors serve on both company boards, including Mr. Vimalchand Jugraj Rathod, Mr. Rajesh Khubilal Rathod, Mr. Mohit Khubilal Rathod, and Mr. Sumit Rathod, ensuring oversight and governance alignment across the corporate structure.

The promoters have been informed of the compliance matter as advised by BSE Limited, and the company has reiterated its commitment to ensuring strict and timely regulatory compliance going forward. The board emphasized that the non-compliance was not willful and has advised enhanced attention to compliance requirements to prevent future occurrences.

Impact Assessment

Regarding the corporate guarantee, the board noted that there is currently no anticipated impact on the listed entity. The guarantee structure maintains arm's length principles and adheres to regulatory frameworks, supporting subsidiary operations while protecting shareholder interests. Flair Writing Industries continues to focus on strengthening its operational capabilities through strategic subsidiary support while maintaining robust governance standards.