Akzo Nobel India's shares are expected to be active following a significant revision to a Goods and Services Tax (GST) penalty. The company has received a favorable revision from the Karnataka GST Department regarding a tax demand for the financial year 2018-19.
The initial demand of ₹176.65 crore, which included tax, interest, and penalty, has been drastically reduced to ₹41.56 lakh. This substantial reduction follows the company's response to a show-cause notice related to input tax credit disallowance. Input tax credit allows businesses to deduct the GST paid on inputs from the GST collected on outputs, effectively reducing their tax liability. The department's show-cause notice, dated June 27, 2025, alleged that Akzo Nobel India had wrongly claimed input tax credit, proposing a total demand of ₹176.65 crore. This figure was broken down into ₹56.52 crore for tax, ₹63.61 crore for interest, and a substantial ₹56.52 crore for penalty, citing a violation of Section 74 of the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) Act, 2017. Akzo Nobel India submitted a detailed response, including supporting documents, to contest the proposed demand.
The Assistant Commissioner of Commercial Taxes, located at the Large Taxpayers Unit in Bengaluru, reviewed the company's submission. In an order dated December 30, 2025, which the company received on January 1, 2026, the department significantly revised the demand. The new order reduces the total liability to ₹41.56 lakh. This revised amount comprises ₹12.90 lakh in tax, ₹15.77 lakh in interest, and a penalty of ₹12.90 lakh. The company is currently responding to the revised order.
In a separate instance, Akzo Nobel India received an order from the Bihar GST Department following a show cause notice. The notice, issued on September 10, 2025, pertained to a disallowance of input tax credit for the period of April 2021 to March 2022. The initial demand of ₹23,03,936 has been revised to ₹2,29,984. The revised demand now totals ₹2,29,984, comprising ₹1,20,846 in tax, ₹79,138 in interest, and a penalty of ₹30,000. Akzo Nobel India is currently in the process of responding to the order within the specified timeframe by submitting further information to the relevant authorities.
Additionally, regarding a tax litigation with the Karnataka GST Department concerning disallowance of input tax credit for the period April 2021 to March 2022, the initial GST demand of about Rs 14.96 crore was reduced to approximately Rs 2.46 crore. The order remains open to further submissions, and the company is in the process of responding within the prescribed timeframe.
These developments indicate a trend of GST demand revisions for Akzo Nobel India, potentially influencing the company's tax position. Akzo Nobel India Limited is a leading paints and coatings company operating in India, offering decorative and industrial coatings and related solutions.
