JSW Infrastructure Limited is required to pay ₹965.8 million in penalties following a tax notice from authorities claiming GST short payment for the period spanning from 2019 to 2024. This development represents a significant financial obligation for the marine port and services company.

Tax Notice and Penalty Details

The tax authorities have issued a notice to JSW Infrastructure alleging shortfall in Goods and Services Tax (GST) payments over a five-year period, resulting in substantial penalties. The notice covers the timeframe from 2019 to 2024, with the company now facing a considerable financial liability.

Financial Impact

The ₹965.8 million penalty represents a substantial financial burden for JSW Infrastructure. This amount reflects the severity of the alleged GST payment shortfall identified by tax authorities during their comprehensive review of the company's tax compliance over the five-year period.

Regulatory Implications

The issuance of this tax notice and the resulting penalty obligation represents a significant regulatory challenge that JSW Infrastructure must address. Such notices typically require companies to provide detailed documentation and explanations regarding their tax compliance during the specified period.

The company operates in the marine port and services sector and will need to work with tax authorities to resolve the matter. The notice period spanning five years indicates a comprehensive review of the company's GST payment history, culminating in this substantial penalty assessment.

Next Steps

JSW Infrastructure will need to engage with tax consultants and legal advisors to address the penalty payment requirement and respond to the notice appropriately. The company may explore options to contest the penalty amount or negotiate payment terms while providing necessary documentation and clarifications to address the claims made by the tax authorities regarding the alleged GST payment shortfall.

JSW Infrastructure Limited has announced a postal ballot seeking shareholder approval for a significant ₹1,212 crore acquisition in the rail logistics sector. The company issued the notice on December 19, outlining a material related party transaction that could substantially expand its logistics capabilities.

Transaction Overview

The proposed acquisition involves JSW Port Logistics Private Limited, a wholly-owned subsidiary of JSW Infrastructure, purchasing 100% equity stake in three specialized rail logistics companies from JSW Shipping Logistics Private Limited, a promoter group entity. The target companies include JSW Rail Infra Logistics Private Limited, JSW Minerals Rail Logistics Private Limited, and JSW (South) Rail Logistics Private Limited.

Strategic Rationale and Business Benefits

The acquisition provides JSW Infrastructure immediate access to the General Purpose Wagon Investment Scheme (GPWIS) and Liberalized Special Freight Train Operator Scheme (LSFTO) frameworks. Indian Railways has implemented a moratorium on new GPWIS licenses until February, making this acquisition strategically valuable for market entry.

The target entities currently operate 21 railway rakes, comprising 15 rakes under JSW Minerals and 6 rakes under JSW Rail. These assets are pre-approved by railway authorities and include long-term contractual agreements with anchor customers like JSW Steel Limited and Bhushan Power Steel Limited, ensuring predictable cash flows.

Financial Projections and Valuation

According to the valuation report by PwC Business Consulting Services LLP dated December 8, the combined enterprise value of the three target entities is estimated at ₹1,314.00 crore. The company has negotiated a more favorable consideration of ₹1,212.00 crore for the transaction.

The transaction is expected to be EPS accretive and aligns with the company's strategic objective of achieving ₹8,000.00 crore topline in the logistics segment by fiscal year 2030.

Voting Process and Timeline

Shareholders can participate in the postal ballot exclusively through remote e-voting, with no physical ballot forms being distributed. The voting process is managed by KFin Technologies Limited as the service provider.

Only members whose names appear in the Register of Members/List of Beneficial Owners as of the cut-off date are eligible to vote. Mr. Sunil Agarwal has been appointed as the scrutinizer for conducting the postal ballot process.

Regulatory Approvals and Governance

The transaction has received unanimous approval from the Audit Committee and Board of Directors on December 8. The Audit Committee, constituted by a majority of Independent Directors, thoroughly reviewed the transaction along with the PwC valuation report. Mr. Sajjan Jindal, Chairman and Non-Executive Director, abstained from participation and voting due to his related party status.

The acquisition is subject to regulatory approval from the Ministry of Railways and other necessary authorities. Related parties, including promoter group entities, will abstain from voting on the resolution as per regulatory requirements.

The postal ballot notice and explanatory statement are available on the company's website at www.jsw.in/infrastructure and on the websites of stock exchanges BSE and NSE.