Kalpataru Subsidiary Faces Rs 73.85 Crore GST Demand

Demand Amount: Rs 73.85 Crore | Period: FY 2025-26

Reader Takeaway: Company contests the tax demand as legally unsustainable and confirms no material impact on business operations.

What just happened

Kalpataru Limited informed the BSE that its wholly-owned subsidiary, Kalpataru Properties Limited, received a Show Cause-cum-Demand Notice from GST authorities. The notice, issued under Section 74A of the CGST Act, 2017, demands Rs 73.85 crore, including applicable interest and penalties. The demand pertains to construction services provided during the 2025-26 financial year.

Why this matters

While the demand notice involves a substantial sum, the company has clarified its stance immediately. By terming the demand unsustainable, management aims to reassure investors that the tax claim lacks merit under existing legal interpretations. The disclosure ensures transparency under SEBI listing regulations, allowing shareholders to stay informed about potential regulatory liabilities.

Management Response

Kalpataru Limited has reviewed the notice and intends to file a formal reply contesting the authority's assessment. Crucially, the company stated that the demand will not have a material financial impact on its ongoing operations or cash flow. This proactive stance signals that management views the event as a manageable regulatory dispute rather than a financial setback.

What to track next

Investors should monitor future BSE filings for updates on the subsidiary's response to the tax department. Any further communications from the GST Authority or developments in the adjudication process will be critical for determining the final tax liability.