Valiant Laboratories Limited has received a final order from the Assistant Commissioner of CGST & Central Excise, Division-IV, Navi Mumbai Commissionerate, confirming a tax demand and penalty totaling ₹62.97 lakh for alleged wrong availment of Input Tax Credit (ITC) on capital goods.

GST Order Details

The order dated December 26, 2025, confirms a demand for wrong availment of Input Tax Credit on capital goods for the financial year 2021-22. The company had claimed depreciation on the GST component of capital goods, which has been held to be impermissible by the tax authorities.

Regulatory Violations Alleged

The GST authorities have identified violations under multiple sections of the CGST Act, 2017. The disallowance pertains to ITC on capital goods due to non-fulfillment of conditions and claim of depreciation on tax component, allegedly violating Sections 16(2), 17(5), 73, 50 and 122(2)(a) of the CGST Act, 2017, along with applicable provisions of the IGST and MGST Acts.

Company's Response Strategy

Valiant Laboratories has stated that it is evaluating all available options, including filing an appeal against the order before the appropriate authority. The company is assessing the course of action to challenge the GST order and present its case to higher tax authorities.

Compliance and Disclosure

In adherence to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the pharmaceutical company has promptly informed the stock exchanges about this development. The intimation has also been uploaded on the company's website at www.valiantlabs.in , ensuring transparent communication with all stakeholders.

Financial Impact Assessment

The confirmed liability of ₹62.97 lakh represents a reduction from the earlier proposed amount of ₹70.81 lakh mentioned in the show-cause notice. While this remains a significant financial obligation for the small-cap pharmaceutical company, the final outcome will depend on the success of any appeal proceedings the company may initiate.

Valiant Laboratories held its 4th Annual General Meeting (AGM) on September 25, 2025, where shareholders approved significant management changes and a new auditor appointment. The company, known for its presence in the chemical and pharmaceutical industry, made these decisions to strengthen its leadership and compliance structure.

Management Reappointments and Changes

The AGM saw the reappointment of Mr. Santosh Vora as the Managing Director. Mr. Vora, who holds a bachelor's degree in commerce with a specialization in Financial Markets from the University of Mumbai, brings over 8 years of experience in the chemical and pharmaceutical industry to his role. He is responsible for overseeing the company's overall management, focusing on growth initiatives, new product development, and process optimization.

In a notable change, Mr. Paresh Shah's designation was altered from Executive Director & Chief Financial Officer to Whole-Time Director & Chief Financial Officer. Mr. Shah, a Chemical Engineer with a master's degree from Washington State University, boasts over 35 years of industry experience. His responsibilities include overseeing factory operations, legal matters, and financial activities such as budgeting, forecasting, and working capital management.

Auditor Appointment

The shareholders approved the appointment of M/s. Mehta & Mehta, Practicing Company Secretaries, as the Secretarial Auditors for a term of five consecutive years, starting from FY 2025-26 to FY 2029-30. Mehta & Mehta is a reputed corporate legal and secretarial advisory firm with over 25 years of experience, known for its expertise in SEBI and company law compliance, due diligence, and corporate restructuring.

Corporate Governance and Compliance

Both Mr. Santosh Vora and Mr. Paresh Shah confirmed that they are not debarred from accessing capital markets or restrained from holding director positions by SEBI or any other authority. This confirmation aligns with the regulatory requirements set by BSE and NSE circulars.

Company Performance and Strategy

During the AGM, Mr. Santosh Vora presented an overview of the company's performance for FY 2024-25. He acknowledged challenging market conditions, including overcapacity and pricing pressures in the paracetamol API segment, which impacted revenue and EBITDA. However, he outlined strategic responses, including:

1. Capacity expansion at the Tarapur facility
2. Strengthening of the supply chain
3. Enhanced sustainability practices
4. Progress on a greenfield project under the wholly-owned subsidiary, Valiant Advanced Sciences Pvt. Ltd.
5. Successful development and customer approval of over a dozen specialty chemicals through a new pilot plant

Diversification and Future Outlook

The company's efforts in developing specialty chemicals mark a significant step towards diversification beyond paracetamol. This strategic move is aimed at broadening the company's product portfolio and reducing dependence on a single product line.

Mr. Vora expressed confidence in Valiant's future, emphasizing the company's commitment to growth and innovation. He also highlighted the company's continued efforts in community engagement, including support for animal welfare and education initiatives.

The management changes and strategic initiatives announced at the AGM reflect Valiant Laboratories' focus on strengthening its market position and adapting to industry challenges. As the company moves forward with its diversification plans and capacity expansion, stakeholders will be watching closely to see how these changes translate into financial performance and market competitiveness in the coming years.