Disclosure on Show Cause Notice received from Additional Commissioner of Central Tax & Central Excise Commissionerate, Chennai.
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Rane (Madras) Limited has received a Show Cause Notice from the Additional Commissioner, Office of the Commissioner of Central Tax and Central Excise, Audit-I Commissionerate, Chennai, dated June 30, 2025. The notice relates to 11 claims covering alleged excess or wrong availment of Input Tax Credit (ITC), short payment of tax, ITC on blocked credits, and issues around job work procedure and Reverse Charge Mechanism (RCM) applicability for Financial Years 2018-19 to 2023-24. The total tax demand mentioned in the notice is Rs. 22.64 Crores, along with applicable interest and penalty under Section 74 of the CGST/TNGST Act. The company has stated it is confident of providing all relevant information in its reply to contest and set aside the entire demand, and is in the process of submitting its response within the prescribed timeline.
This is a tax-related demand that, if upheld, could result in a financial impact of Rs. 22.64 Crores plus interest and penalties — a meaningful outflow for the company. However, the matter is at a show cause stage and not yet a final order, and the company has expressed confidence in contesting it successfully, so the immediate impact on shareholders is limited pending the outcome of the response.