CG Power and Industrial Solutions Tax Dispute Update

Tax Demand: Rs 215.59 crore | Scheduled Payment: Rs 30 crore

Reader Takeaway: Tax demand stayed pending appeal outcome, though the company must pay Rs 30 crore in installments.

What just happened

CG Power and Industrial Solutions Limited has secured a stay order from the Income Tax Department regarding a revised tax demand of Rs 215.59 crore for the Assessment Year 2022-23. The stay remains effective until the Commissioner of Income Tax (Appeals) disposes of the company's pending appeal. As a condition of this stay, the company is required to make a scheduled payment of Rs 30 crore, structured into five separate installments.

The backstory

The tax demand has evolved through several stages over the past two years. Initially, in February 2024, a demand of Rs 188.79 crore was raised, which was stayed after a Rs 4.89 crore deposit. This escalated in April 2026 to Rs 236.74 crore following a revisionary assessment order. A subsequent rectification order issued on June 4, 2026, brought the final disputed amount to the current figure of Rs 215.59 crore.

What changes now

The company has formally filed an appeal against the revisionary assessment order, which was submitted on May 18, 2026. The new order dated September 7, 2026, provides temporary relief by preventing further coercive collection actions on the bulk of the disputed amount, provided the company complies with the mandated installment plan.

Risks to watch

The primary risk remains the final adjudication of the appeal by the CIT(A). While the current order provides a mechanism for payment and stay, the company’s final tax liability for the 2022-23 assessment year remains subject to the appellate process. Investors should monitor future disclosures for any developments in these legal proceedings.

What to track next

Shareholders should keep a close watch on the outcome of the appeal before the CIT(A) and monitor the company's cash flow management as it meets the required installment payments.