Zenlabs ethica Ltd has received a GST demand notice from the Central Goods and Services Tax Division, marking a significant regulatory development for the pharmaceutical company. The notice, issued under Section 73 of the CGST Act, 2017, relates to alleged tax violations during the 2019-20 period.

GST Demand Notice Details

The demand notice, bearing Order No. 10/GST/SUPDT/DB.I/R.I/2024-25, was dated February 16, 2026, and received by the company on February 23, 2026. The notice was issued by the Superintendent, Range I, Central Goods and Services Tax Division-1, Derabassi, Government of Punjab.

Financial Impact Breakdown

The GST demand notice alleges multiple violations stemming from under-declaration of taxable turnover. The total financial impact comprises several components across different categories of alleged non-compliance.

Alleged Violations

The Central GST Division has identified several areas of non-compliance during the 2019-20 tax period. The primary allegation centers on under-declaration of taxable turnover, which has led to cascading effects across multiple tax compliance areas.

The specific violations alleged include:

• Short payment of tax liability due to under-declaration
• Claiming ineligible input tax credit
• Interest charges on late payment of taxes
• Penalty imposition under the prescribed provisions

Company Response and Impact Assessment

Zenlabs Ethica has indicated that the financial impact of the notice is limited to the extent of the demand, penalty, and interest levied. The company has stated there is no material impact on its financial operations or other business activities due to this notice.

The company plans to take appropriate action regarding the demand notice within the prescribed timeline as per regulatory requirements. This development has been disclosed under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, ensuring transparency with stakeholders and the stock exchanges.

Zenlabs Ethica Limited reported a substantial net loss of ₹200.76 lakhs for the third quarter of FY26 ended December 31, 2025, marking a significant reversal from the profit of ₹8.51 lakhs recorded in the corresponding quarter of the previous year. The loss was primarily driven by exceptional charges related to the company's exit from its Non-Banking Financial Company (NBFC) operations following regulatory action by the Reserve Bank of India.

Financial Performance Overview

The company's financial performance for Q3FY26 reflected the impact of regulatory changes and business realignment:

NBFC Registration Cancellation Impact

The company faced a major regulatory setback when the Reserve Bank of India cancelled its NBFC registration certificate on November 7, 2025, under Section 45-IA of the RBI Act, 1934. This regulatory action prohibited the company from continuing its NBFC activities, necessitating a complete business model realignment.

As a result of this development, Zenlabs Ethica disposed of and wrote off investments and other loans and advances that were no longer consistent with its permitted operations. The financial impact of ₹207.81 lakhs from these disposals and write-offs was classified as an exceptional item in Q3FY26.

Leadership Appointments

The Board of Directors approved the appointment of Amit Kumar as Company Secretary and Compliance Officer effective February 7, 2026. This appointment was made to fulfill the requirements of Section 203 of the Companies Act, 2013, and Regulation 6(1) of the SEBI Listing Regulations.

Amit Kumar brings relevant qualifications to the role, being an Associate member of the Institute of Company Secretaries of India. His remuneration and other terms of appointment will be governed by the Nomination and Remuneration Committee and the Board of Directors.

Nine-Month Performance

For the nine months ended December 31, 2025, the company reported:

Current Business Focus

Following the NBFC registration cancellation, Zenlabs Ethica continues to operate as a single-segment company engaged in the trading of pharmaceutical formulations. The company maintains its registered office in Chandigarh and continues its pharmaceutical trading operations while adapting to the regulatory changes that have eliminated its financial services activities.

The Board of Directors approved these developments in their meeting held on February 7, 2026, with the statutory auditors N Kumar Chhabra and Co. providing an unmodified opinion in their limited review report on the financial results.