Havells India Limited has disclosed receiving an income tax penalty of ₹1.10 crores for financial year 2009-10, as communicated to stock exchanges under regulatory compliance requirements. The penalty notice was received via email on December 31, 2025, marking a significant regulatory development for the consumer durables company.

Penalty Details and Authority

The income tax penalty has been imposed by the Deputy Commissioner of Income Tax, Central Circle-17, Delhi. The penalty amount of ₹1,10,61,896 relates to Assessment Year 2010-11, corresponding to financial year 2009-10.

Legal Basis and Violation

The penalty has been imposed under Section 271(1)(c) of the Income Tax Act, 1961. This section typically deals with penalties for concealment of income or furnishing inaccurate particulars of income. The company received the computation sheet detailing the penalty calculation through official email communication from the Income Tax Department.

Company's Response and Impact Assessment

Havells India Limited has assessed that the penalty will have no material impact on its financial position, operations, or other business activities. The company has indicated its intention to challenge the penalty through proper legal channels.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company provided comprehensive details as required under sub-para 20 of Para A of Part A of Schedule III of the SEBI LODR regulations, ensuring transparency with stakeholders and regulatory authorities.

The company plans to file an appeal before the Commissioner of Income Tax (Appeals) in consultation with its tax advisors, indicating a structured approach to addressing the penalty through established legal procedures.

The High Court has provided clarification on the GST rate reduction matter for air purifiers, stating that any decision to reduce the tax from 18% to 5% is a policy decision that must be taken by the GST council. The court emphasized that the council comprises members from all states, making it impractical for the court to give concrete instructions that would require contacting each state official individually.

Court's Position on GST Council Authority

The High Court's latest statement clarifies the jurisdictional boundaries regarding GST rate modifications. The court acknowledged that while there is a petition for reducing GST on air purifiers, the decision-making authority lies with the GST council, which operates as a federal body with representation from all states. This represents a nuanced approach compared to previous court interventions in tax matters.

GST Rate Structure and Proposed Changes

The ongoing discussion centers around reclassifying air purifiers under a more favorable tax bracket. The following table outlines the current tax structure and proposed modifications:

Implications for Consumer Durables Sector

This development affects companies operating in the consumer durables space, including Havells India , which manufactures air purifiers among other products. The court's clarification indicates that any GST rate reduction would require consensus among state representatives within the GST council framework, rather than judicial directive.

Policy Decision Framework

The High Court's statement underscores the federal structure of GST decision-making in India. The GST council's composition, which includes finance ministers from all states and union territories, ensures that tax rate modifications require broad consensus. This approach maintains the collaborative nature of GST implementation while respecting state autonomy in tax policy decisions. The court's position reflects the constitutional framework where policy decisions of this nature fall under the purview of the executive branch rather than judicial intervention.