Akzo Nobel India Makes Progress in Resolving GST Demand Notice

Akzo Nobel India Limited (Akzo Nobel) recently achieved a partial victory in an ongoing Goods and Services Tax (GST) matter. The company disclosed this development in a filing dated April 28, 2024.

Background

• During a GST audit for the financial year 2018-2019, the Punjab GST Department issued Akzo Nobel a Show Cause Notice (SCN) dated January 24, 2024.
• The SCN proposed disallowance of Akzo Nobel’s Input Tax Credit (ITC) claimed under the CGST/SGST Act, 2017. This resulted in a substantial demand notice of ₹13,22,27,096, encompassing tax, interest, and penalty.

Akzo Nobel’s Response

Akzo Nobel promptly addressed the SCN by submitting a comprehensive response within the designated timeframe. This response included detailed explanations and supporting documents to substantiate their ITC claims.

Positive Outcome – Reduced Demand

The Deputy Commissioner of State Tax, Punjab GST Department, reviewed Akzo Nobel’s response and supporting evidence. This resulted in a revised Order issued on April 26, 2024, reflecting a significant reduction in the initial demand:

• A positive development for Akzo Nobel, the revised Order dropped a substantial portion of the initial demand – ₹2,41,40,717.
• However, the Order still proposes a final demand of ₹10,80,86,379, broken down into:

• Tax: ₹5,16,24,612
• Interest: ₹5,12,99,306
• Penalty: ₹ 51,62,461

Looking Ahead

The revised Order allows Akzo Nobel the opportunity to further contest the remaining demand before the relevant authorities within a stipulated time frame. They are currently in the process of preparing and submitting a response to address the remaining concerns raised by the department.

This development signifies a positive step for Akzo Nobel in resolving the GST demand notice. Their proactive approach in submitting a detailed response with supporting documents has demonstrably influenced the initial demand amount. The final outcome will depend on the next stage of the process and the success of Akzo Nobel’s response to the revised Order.

About Akzo Nobel India Limited

Akzo Nobel India manufactures paints, varnishes, enamels, and lacquers under its main brand, Dulux paints. On April 29, 2024, Akzo Nobel’s shares opened at ₹2,456.90 and touched the day high of ₹2,470.20 at 10:20 AM.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.