EPACK Durable to Appeal ₹41.40 Lakh GST Demand

EPACK Durable Limited announced it has received a Goods and Services Tax (GST) demand order totaling ₹41.40 lakh from the Assistant Commissioner, Central GST, Dehradun. The demand is based on allegations of unpaid GST on a corporate guarantee that its former subsidiary, EPACK Components Private Limited (ECPL), provided before the two companies merged. The total amount includes ₹20.70 lakh in GST and ₹20.70 lakh in penalties.

The company plans to contest this order by filing an appeal. EPACK Durable stated it is confident in the legal merits of its case and does not anticipate any significant adverse financial impact from this demand.

This situation highlights the importance of GST compliance for corporate guarantees, particularly concerning transactions involving former subsidiaries.

Previous Regulatory Issues

EPACK Durable has faced previous GST-related scrutiny. In August 2024, the company was assessed a ₹13.85 lakh GST penalty for FY 2019-20 concerning Input Tax Credit (ITC) claims, which it also intended to appeal. Additionally, in September 2025, GST officials investigated EPACK Durable over alleged tax fraud amounting to ₹5 crore, linked to forged transportation records and ITC claims. The company acknowledged defaults and paid a portion of the amount at that time.

EPACK Durable merged with its wholly-owned subsidiary, EPACK Components Private Limited (ECPL), which manufactured electronic appliance components, in May 2024.

Generally, GST on corporate guarantees is levied at 18%, calculated on the higher of 1% of the guaranteed amount or the actual consideration.

What Happens Next

EPACK Durable will proceed with filing its appeal against the GST demand order. Based on its current assessment, the company believes its appeal has a strong chance of success, mitigating any substantial negative financial consequences. Shareholders will be watching the appeal process closely.

Potential Risks

Should EPACK Durable's appeal be unsuccessful, the company could face the financial burden of paying the demand. There is also a possibility of further regulatory attention if the appeal is not upheld.

Peer Group

EPACK Durable operates within the consumer durables and electronics manufacturing sector. Its industry peers include companies such as Havells India, Crompton Greaves Consumer Electricals, Bajaj Electricals, and Orient Electric. These companies navigate similar market dynamics and regulatory environments, including GST compliance requirements.

Key Points to Monitor

Investors will be looking for updates on the progress of EPACK Durable's appeal filing. Close attention will be paid to any communications from GST authorities regarding the proceedings and their eventual resolution.