Laxmi Organic Industries Limited , a key player in the Indian chemical industry, has received a favorable ruling from the Bombay High Court regarding a contentious tax issue affecting exporters using the Advance Authorisation Scheme. The court's decision, which disposes of writ petitions challenging Rule 96(10) of the CGST Rules, 2017, brings clarity to the company's tax position and potentially impacts its financial operations.

Court Ruling and Its Implications

The Bombay High Court disposed of a batch of writ petitions filed by various companies, including Laxmi Organic Industries. These petitions challenged the validity and constitutionality of Rule 96(10) of the CGST Rules, 2017. The rule had created challenges for exporters utilizing the Advance Authorisation Scheme, which allows the import of raw materials without paying Integrated Goods and Services Tax (IGST). However, it also barred these exporters from claiming IGST refunds on their final export products.

Key Points of the Judgment

The court's decision acknowledges the repeal of Rule 96(10) via a notification. Importantly, the judgment states that:

1. All pending proceedings, including undisposed show cause notices, will stand lapsed.
2. Orders disposing of show cause notices issued after the repeal are no longer valid.
3. Orders made before the repeal but not yet finalized due to ongoing appeals or challenges will also lapse.

The court has effectively quashed and set aside the impugned show cause notices and original orders related to this matter.

Impact on Laxmi Organic Industries

For Laxmi Organic Industries, this ruling provides much-needed finality on the treatment of IGST refund eligibility. The company disclosed in its LODR filing that it is currently reviewing the implications of the judgment on its operations and pending matters. This review is likely to encompass:

1. Potential financial benefits from IGST refunds that were previously disallowed.
2. Reassessment of tax liabilities and refund claims.
3. Possible adjustments to financial statements and tax planning strategies.

Industry-Wide Implications

The Bombay High Court's decision is not limited to Laxmi Organic Industries but extends to other companies that had filed similar petitions. This ruling is expected to have far-reaching consequences for exporters across India who use the Advance Authorisation Scheme, potentially improving their cash flow and reducing tax-related complexities.

Looking Ahead

As Laxmi Organic Industries and other affected companies analyze the full impact of this judgment, the industry will be watching closely for any changes in export strategies, financial reporting, and overall business operations. The resolution of this long-standing issue may contribute to a more favorable business environment for exporters and potentially boost India's export competitiveness.

Investors and stakeholders of Laxmi Organic Industries will likely anticipate updates from the company regarding the quantitative impact of this ruling on its financials in the coming quarters.

Laxmi Organic Industries Limited has secured a significant global sourcing agreement with Hitachi Energy Limited, Switzerland, marking a major milestone for the Indian chemical manufacturer. The deal, signed on September 9, 2025, spans a five-year period and involves the supply of eco-efficient gas for Hitachi Energy's SF6-free high-voltage switchgear portfolio.

Key Highlights of the Agreement

Strategic Implications

This agreement positions Laxmi Organic Industries as a key supplier in the growing market for environmentally friendly electrical equipment. The deal aligns with the global trend towards reducing the use of sulfur hexafluoride (SF6), a potent greenhouse gas commonly used in electrical insulation.

Financial Aspects

While the exact size of the contract remains undetermined at this stage, the ₹75.00 crore capital expenditure commitment from Laxmi Organic Industries underscores the company's confidence in the long-term potential of this partnership. This investment is likely to enhance the company's manufacturing capabilities and potentially open doors to new market segments.

Corporate Governance

It's worth noting that the agreement does not involve any promoter group interest or related party transactions, ensuring transparency and adherence to good corporate governance practices.

Outlook

This global sourcing agreement represents a significant opportunity for Laxmi Organic Industries to expand its footprint in the international market and diversify its product portfolio. The partnership with a renowned global player like Hitachi Energy could potentially lead to further collaborations and growth opportunities in the future.

As the demand for eco-friendly alternatives in the energy sector continues to rise, Laxmi Organic Industries appears well-positioned to capitalize on this trend through its strategic partnership with Hitachi Energy.