Diligent Media Corporation has disclosed receiving a Show Cause Cum Demand Notice from the CGST Anti-Evasion wing. The demand includes Rs 1.08 crore related to Input Tax Credit for FY22 and Rs 4.90 lakh for tax short-payments in FY21. The company is currently consulting legal experts to challenge these claims.
Diligent Media Receives GST Demand Notice
Total demand: Rs 1.13 crore plus applicable interest and penalties.
Reader Takeaway: The company plans to contest the GST notice, though uncertainty remains regarding potential interest and penalty outflows.
What just happened
Diligent Media Corporation Limited informed the stock exchanges on August 31, 2026, about a Show Cause Cum Demand Notice (SCN) issued by the Assistant Commissioner, Anti-Evasion, CGST & CX, Mumbai Central Commissionerate. The notice alleges tax irregularities under Section 74 of the CGST Act, 2017.
Why this matters
The notice primarily challenges Input Tax Credit (ITC) worth Rs 1.08 crore claimed during FY 2021-22. This issue stems from transactions with a vendor whose GST registration was cancelled retroactively. Additionally, the department has cited a short-payment of outward tax liability amounting to Rs 4.90 lakh for FY 2020-21.
Company Response
Management has formally responded that they are evaluating the notice with legal counsel. The company intends to appeal the demands before the relevant authorities to dispute the allegations. They have confirmed that this matter does not pose a material impact on their broader operational or financial health beyond the specific tax amounts disclosed.
What to track next
Investors should monitor future exchange filings for updates on the legal challenge. Key indicators will include any potential settlement outcomes, the quantification of interest and penalties by the tax department, and the outcome of the appellate proceedings.