LT Foods has received significant relief in export duties for its subsidiary Ecopure Specialities Limited's organic soybean meal exports to the United States. The company disclosed this development through a regulatory filing under SEBI Regulation 30, providing updates on the countervailing duty order revision that resulted in a substantial reduction of potential liability by Rs. 163 crore.

Administrative Review Background

The development stems from an administrative review initiated by the United States Department of Commerce, International Trade Administration for the period January 1, 2023 to December 31, 2023. During this review, the US DoC had initially applied the 'adverse facts available' methodology to Ecopure, resulting in a provisional CVD rate that significantly impacted the subsidiary's export operations. Ecopure had sales of Rs. 50 crore during the January-December 2023 period under review.

Final Order Details

The US Department of Commerce issued its Final Order on February 23, 2026, bringing substantial relief to LT Foods' export operations. The countervailing duty rate applicable to Ecopure's organic soybean meal exports has been dramatically reduced through this final determination.

Regulatory Compliance and Disclosure

LT Foods has maintained transparency throughout this process, having previously informed exchanges about the administrative review initiation through communications dated June 20, 2025 and June 23, 2025. The company's latest disclosure on February 25, 2026, provides stakeholders with the final outcome of the lengthy administrative review process, highlighting the substantial financial impact of the duty reduction.

Business Impact

This substantial duty reduction enhances the competitiveness of Ecopure's organic soybean meal products in the US market. The lower duty structure, combined with the Rs. 163 crore reduction in potential liability, is expected to improve profit margins significantly and make the company's organic food products more attractive to US importers, potentially boosting the subsidiary's export performance in future periods.

LT Foods Limited has received an unfavorable appellate order from tax authorities, resulting in the confirmation of a significant GST demand that was previously dropped by lower authorities.

Appellate Order Details

The Commissioner of CGST (Appeals-II), Delhi issued Appellate Order No. C.NO 1316/C/GST/DL-APPEAL-II/2025-26/6801 dated January 30, 2026, which the company received on February 4, 2026. The order has reversed an earlier favorable decision and confirmed a substantial tax demand against the rice manufacturer.

Background of the Tax Dispute

The case involves a complex sequence of decisions by different tax authorities. Initially, the Additional Commissioner, CGST, Delhi South Commissionerate had passed an Order-in-Original dated January 27, 2025, whereby the GST demand of ₹32.41 crore proposed in the Show Cause Notice was dropped, providing relief to LT Foods.

However, the Assistant Commissioner, CGST, Delhi South Commissionerate subsequently filed a departmental appeal before the Commissioner of CGST (Appeals-II), Delhi, challenging this favorable order. The appellate authority has now allowed the departmental appeal and set aside the Order-in-Original to the extent of dropping the demand.

Nature of Alleged Violation

The tax demand stems from alleged wrongful availment of GST exemption under Notification No. 02/2017-CT (Rate) dated June 28, 2017. The authorities contend that LT Foods' supplies of rice made in plain packaging were not eligible for exemption under the applicable provisions of the CGST Act, 2017.

The GST demand of ₹32.41 crore has been confirmed under Section 74 of the CGST Act, 2017, along with applicable interest under Section 50 and penalty as prescribed under Section 74 of the same Act.

Company's Response and Next Steps

LT Foods has indicated its intention to challenge the appellate order through further legal recourse. Based on legal advice received from the company's counsel, LT Foods believes it has strong grounds on merits to challenge the order and intends to file an appeal before the appropriate GST Appellate Tribunal within the prescribed timelines.

The company has stated that at this stage, it does not foresee any material impact on its financial position or operational performance arising from the order. This assessment suggests confidence in the company's legal position and its ability to manage the financial implications during the appeal process.

Regulatory Compliance

The disclosure has been made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, demonstrating the company's commitment to transparent communication with stakeholders regarding material developments that could impact its operations.