Rane Madras Limited has informed stock exchanges about receiving a show cause notice from the Principal Commissioner of Income Tax Chennai regarding disallowance of certain expenditures worth ₹7.61 crores. The disclosure was made on January 10, 2026, under Regulation 30 of SEBI LODR regulations.

Show Cause Notice Details

The company received the show cause notice on January 09, 2026, under Section 263 of the Income Tax Act, 1961. The notice specifically relates to the disallowance of expenditures concerning treatment of trademark fee expenditure and actuarial gain/loss on Defined Benefit Plan of Gratuity.

Financial Implications

The expected financial implications on Rane (Madras) Limited amount to ₹2.66 crores, excluding applicable interest and penalty, if any. This represents the potential impact on the company's financials should the income tax authority's position be upheld.

Company's Response Strategy

Rane (Madras) Limited has outlined its approach to address the show cause notice. The company stated that it will file a suitable reply before the appropriate authority within the prescribed timelines, in consultation with its consultants and tax advisors.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30(13) of SEBI LODR regulations, specifically under Part A Para B.8 Schedule III. The company has declared that the information provided is true, correct and complete to the best of its knowledge and belief, as per the SEBI Master Circular dated November 11, 2024.

The matter pertains to the company's financial operations during the financial year 2019-20, and the outcome will depend on the company's response to the income tax authorities and subsequent proceedings.

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.