Rane (Madras) Limited has received another tax demand order from GST authorities, this time for ₹0.39 crores with a penalty of ₹0.04 crores, marking the latest in a series of regulatory challenges for the auto ancillary company. The order was received on December 31, 2025, from the Additional Commissioner, Office of the Principal Commissioner of CGST and Central Excise, Chennai North Commissionerate.

Latest Tax Demand Details

The tax authorities have issued an order-in-original levying tax demand, interest, and penalty under Section 73 of CGST/TNGST Act read with Section 20 of IGST Act, 2017. This latest order specifically addresses Input Tax Credit (ITC) compliance issues for a single financial year.

Compliance Issue Identified

The current tax demand stems from alleged non-reversal of Input Tax Credit (ITC) as per the credit notes reflected in GSTR-2A. This represents a more specific and focused compliance issue compared to the broader range of violations addressed in the previous order covering multiple financial years.

Comparison with Previous Demands

This latest demand follows a pattern of reduced final orders compared to initial show cause notices. The company had previously received a larger GST demand of ₹12.23 crores for the period FY2018-19 to FY2023-24, which was also contested.

Company's Response Strategy

Rane (Madras) Limited has announced its intention to contest this latest order before the appropriate authority. The company had previously received a show cause notice dated September 30, 2025, for an original demand of ₹2.39 crores, which has now been reduced to ₹0.39 crores in the final order.

Regulatory Compliance

The disclosure has been made under Regulation 30(13) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, which mandates disclosure of communication from regulatory, statutory, enforcement, or judicial authorities. The company will continue to provide updates on the litigation status as proceedings develop before the appropriate authority.

Rane Madras , a leading auto component manufacturer, has reported a robust financial performance for the second quarter, with significant growth in revenue and profitability.

Key Financial Highlights

The company's consolidated financial results for Q2 showcase impressive year-on-year growth:

Revenue Growth Drivers

The company's revenue growth was driven by strong performance across various segments:

• Domestic OE Sales: Grew by 6%, primarily due to higher offtake in the passenger vehicle and farm tractor segments.
• International Sales: Increased by 10%, supported by strong demand for steering products.
• Indian Aftermarket: Experienced a significant 17% growth.

Operational Performance

Rane Madras's EBITDA margin improved to 9.0% in Q2 from 8.8% in the same quarter last year. This 20 basis points improvement was attributed to better absorption of fixed costs.

Market Dynamics

While the company faced lower offtake on specific export customer programs for light metal casting products, it reported that the new tariff situation in the USA has not impacted sales in Q2. The management continues to monitor the evolving tariff situation, expressing hope that ongoing diplomatic dialogues will provide necessary clarity and stability on policy matters.

Half-Year Performance

For the half-year:

• Total revenue stood at ₹1,807.80 crore
• Profit After Tax (PAT) reached ₹40.00 crore, marking a 30.1% year-on-year increase

Management Commentary

Harish Lakshman, Chairman & Managing Director of Rane Madras, stated, "Our Q2 results demonstrate the company's resilience and ability to capitalize on market opportunities. The significant growth in net profit reflects our operational efficiency and strategic initiatives. We remain cautiously optimistic about the future, considering the evolving global trade dynamics."

Future Outlook

While the company has not provided specific forward-looking statements, it has indicated that it continues to monitor the tariff situation, particularly in relation to its international business. The management's focus on operational efficiency and strategic growth in key segments suggests a positive outlook, albeit with careful consideration of external market factors.

Rane Madras's strong performance in Q2 underscores its position as a preferred supplier to major OEMs and aftermarket customers in India and abroad. The company's diverse product portfolio, serving various industry segments including passenger vehicles, commercial vehicles, farm tractors, and two-wheelers, continues to be a key strength in navigating market fluctuations.