KRN Heat Exchanger and Refrigeration Limited , a company specializing in heat exchange and refrigeration solutions, has received a show cause notice from the Goods and Service Tax (GST) authorities in Rajasthan. The notice, issued on October 31, 2025, proposes a tax demand of Rs. 5.53 crores, including interest and penalty.

Details of the Show Cause Notice

The show cause notice, issued under Section 74A(2) read with Section 74A(5)(i) of the SGST Act, 2017 and Section 20 of the IGST Act, 2017, pertains to Input Tax Credit (ITC) availed and utilized by the company. The GST authorities allege that this utilization was in contravention of Section 16 of the GST Act for the period of August 2025.

Key Points of the Notice

Company's Response

In its disclosure to the stock exchanges, KRN Heat Exchanger and Refrigeration Limited stated that it plans to file an appropriate response to the notice within the prescribed timelines. The company will present its case before the Adjudicating Authority.

Potential Impact

While the financial impact of Rs. 5.53 crores is significant, the ultimate outcome will depend on the company's response and the decision of the Adjudicating Authority. Investors and stakeholders should note that this is a proposed tax demand at this stage, and the final liability, if any, may differ based on the adjudication process.

Upcoming Earnings Call

In a separate announcement, KRN Heat Exchanger and Refrigeration Limited has scheduled its Q2 & H1 FY26 Earnings Call for November 6, 2025, at 11:00 AM. This call may provide further insights into the company's financial position and its strategy to address the GST notice.

Investors and analysts will be keenly watching for any updates on this matter during the upcoming earnings call, as it could have implications for the company's financial outlook and compliance procedures.

KRN Heat Exchanger and Refrigeration Limited (BSE: 544263, NSE: KRN) announced a significant milestone in its expansion strategy. The company's wholly-owned subsidiary, KRN HVAC Products Pvt. Ltd., has successfully initiated commercial production and operations of its Bus AC Division at its manufacturing facility in Neemrana, Rajasthan.

Key Highlights

• Commencement Date: October 15, 2025
• Location: Plot No. SP1-24, RIICO Industrial Area, Kolila Joga, Neemrana, Alwar, Rajasthan
• Production Focus: Heat Exchangers and HVAC Products

Strategic Expansion

This development marks a crucial step in KRN Heat Exchanger's growth trajectory, diversifying its product portfolio and strengthening its position in the HVAC sector. The new facility is expected to enhance the company's capabilities in manufacturing bus air conditioning systems, potentially opening up new market opportunities in the commercial vehicle segment.

Management Statement

Santosh Kumar Yadav, Chairman & Managing Director of KRN Heat Exchanger and Refrigeration Limited, confirmed the commencement of operations through an official filing with the stock exchanges. The company views this expansion as a strategic move to capitalize on the growing demand for HVAC solutions in the transportation sector.

Market Implications

The launch of the Bus AC Division could potentially impact KRN Heat Exchanger's market position:

Investors and market analysts will likely monitor the performance of this new division closely, as it could contribute to the company's future growth and profitability.

Conclusion

The commencement of the Bus AC Division by KRN HVAC Products Pvt. Ltd. represents a significant step for KRN Heat Exchanger and Refrigeration Limited. As the subsidiary begins its operations in this new segment, stakeholders will be keen to observe its impact on the company's overall performance and market standing in the coming quarters.