Gujarat Ambuja Exports Receives ₹12.34L GST Demand for FY2018-19

Gujarat Ambuja Exports Limited has disclosed receipt of a GST demand order worth ₹12.34 lakh from tax authorities for the financial year 2018-19. The demand is related to ineligible Input Tax Credit (ITC) claims, as revealed in a regulatory filing.

GST Demand Details

The demand order has been issued under Section 74(9) of the Central Goods and Service Tax Act (CGST Act, 2017) for Financial Year 2018-19. The total tax liability comprises multiple components as detailed below:

Component	Amount (₹)
Tax Amount	3,87,029
Penalty Amount	3,87,029
Interest Amount	4,59,981
Total Demand	12,34,039

The interest component has been levied under Section 50(3) of the CGST Act, 2017, while the penalty has been imposed under applicable provisions of the Central Goods and Services Tax Act, 2017 and rules made thereunder.

Nature of Tax Dispute

According to the company's disclosure, the demand has been raised in relation to ineligible Input Tax Credit (ITC) claimed from cancelled, non-genuine and non-existent taxpayers as per the GST department's assessment. The tax authorities have identified aberrations and non-compliances related to these ITC claims during their examination.

Company's Response and Impact Assessment

Gujarat Ambuja Exports has stated that the demand order has no material impact on the company's financials, operations or other activities. The company plans to file an appeal against the order, viewing it as arbitrary, unjustified, and unsustainable in law.

Next Steps

The company is currently preparing a comprehensive reply along with necessary documentary proof. It intends to file an appeal with the Divisional Deputy Commissioner of State Tax (Appeals) within the prescribed three-month timeline from receipt of the order.

Regulatory Compliance

The disclosure has been made pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has confirmed that the information provided is true, correct and complete to the best of their knowledge and belief, in compliance with Regulation 30(13) of SEBI Listing Regulations.

Gujarat Ambuja Exports has also uploaded this intimation on its official website at www.ambujagroup.com and informed both BSE Limited and National Stock Exchange of India Limited about the development.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.86%	+7.88%	+16.14%	+11.33%	+0.27%	+119.39%

Gujarat Ambuja Exports Limited (GAEL) has released its financial results for the second quarter, revealing a mixed performance with revenue growth but a decline in profitability.

Revenue Growth

The company reported a significant increase in revenue, which rose to 14.87 billion rupees in Q2, up from 11.25 billion rupees in the same period last year. This represents a year-over-year growth of approximately 32.2%, indicating strong top-line performance.

Profit Decline

Despite the revenue growth, GAEL experienced a substantial decrease in net profit. The company's net profit for the quarter stood at 380.8 million rupees, down from 695 million rupees in the corresponding quarter of the previous year. This marks a decline of about 45.2% in net profit.

EBITDA and Margin Compression

The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also saw a decrease:

Metric	Q2 Current Year	Q2 Previous Year	Change
EBITDA (in million rupees)	758.70	1,100.00	-31.0%
EBITDA Margin	5.10%	9.79%	-4.69 percentage points

The EBITDA margin compressed significantly from 9.79% to 5.10%, indicating pressure on the company's operational efficiency.

Management Appointments

In a separate announcement, GAEL's Board of Directors approved the appointment of three new Additional Directors in the category of Non-Executive & Independent Directors, each for a term of five consecutive years, subject to shareholder approval:

Mr. Dukhabandhu Rath (DIN: 08965826)
Mr. Yogesh Ghanshyambhai Shah (DIN: 11203883)
Ms. Gauri Trivedi (DIN: 06502788)

These appointments may bring fresh perspectives and expertise to the company's board.

Conclusion

While Gujarat Ambuja Exports Limited has shown strong revenue growth in the second quarter, the decline in profitability and margin compression suggest challenges in maintaining cost efficiency. Investors and stakeholders will likely be watching closely to see how the company addresses these issues and leverages its revenue growth to improve bottom-line performance in the coming quarters.

The addition of new independent directors to the board may also signal the company's commitment to strengthening its corporate governance and bringing in diverse expertise to navigate the current business environment.