Nephrocare Health Services has disclosed a Rs 14.79 crore tax demand against its Uzbekistan subsidiary, NCA. The demand follows a tax audit in Tashkent covering the 2023-2025 period. The company attributes the issue to data discrepancies regarding tax-exempt medical services and intends to contest the order, stating that it does not expect a material impact on its overall financial health.
Nephrocare Subsidiary Hit with Rs 14.79 Crore Tax Demand
Total liability: Rs 14.79 crore; Net tax assessment: Rs 11.50 crore.
Reader Takeaway: Nephrocare is contesting a large tax claim in Uzbekistan, arguing its medical services qualify for existing exemptions.
What just happened
Nephrocare Health Services Ltd disclosed that its Uzbekistan-based subsidiary, Nephrocare Health Services Central Asia LLC (NCA), has been hit with an aggregate tax demand of approximately Rs 14.79 crore. The order, issued by the Tashkent City Tax Department, follows an audit for the period between January 2023 and December 2025. This amount includes a primary tax assessment of Rs 11.50 crore and a financial penalty of Rs 3.29 crore, excluding additional late-payment interest.
Why this matters
The demand represents a significant financial claim on the subsidiary's operations. The company maintains that its dialysis services in Uzbekistan are tax-exempt, as they account for over 90% of total revenue. The current dispute arises from a mismatch between revenue figures reported by the Tax Department, Ministry of Health payment records, and the company's audited financials.
Company stance and next steps
Management remains optimistic that the order will be set aside. The company believes the demand is based on an incorrect reconciliation of data and has stated that it does not expect any material adverse impact on its consolidated financial position. NCA is currently evaluating its legal options to challenge the assessment, though formal appeal proceedings have not yet commenced.
What to track next
Investors should monitor future BSE filings for updates on the formal appeal process and any reconciliation results with the Tashkent City Tax Department. The tax liability becomes effective one month after the order is presented, making the timing of the company's legal response critical.