Receipt of Show Cause Notice under GST
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Axel Polymers Ltd has received a GST Show Cause Notice from the Office of the Commissioner, Central GST & Central Excise, Vadodara II, dated 19 January 2026 (received on 3 February 2026). The notice alleges that the company wrongfully availed input tax credit without physically receiving inward supplies of goods and passed on such credit without actual supply, covering financial years 2021-22 to 2024-25. A recovery of input tax credit amounting to ₹31.57 crore, along with applicable interest and penalties, has been proposed against the company. The company believes the demand is contrary to CBIC Circular No. 171/03/2022-GST and plans to file a writ petition before the Gujarat High Court. The company has stated there is no immediate financial impact and no effect on routine operations pending the outcome.
This represents a significant contingent liability of ₹31.57 crore plus penalties for a small-cap company, which could weigh on the stock in the near term. However, since the matter is at a preliminary notice stage and the company is actively contesting it, there is no immediate hit to financials — but shareholders should monitor the High Court petition outcome closely.