Shree Cement Hit with ₹588 Crore Tax Demand for FY22, Says No Major Impact Expected

Shree Cement Ltd, India’s leading cement manufacturer, has been served an income tax demand of ₹588.65 crore for the fiscal year 2021–22. The notice came under Section 143(3) of the Income Tax Act after the disallowance of certain claims and deductions under final assessment by the tax authorities.

In a filing to the stock exchange, the company said it is of the view that the tax order has “prima facie errors” and anticipates the challenged sum will decrease substantially after rectifications are done. It also added that part of the demand will be netted against pending refunds, which will mitigate the current cash impact.

“Steps have already been taken by the company, and it is hopeful of a positive outcome based on precedents set in similar earlier cases,” Shree Cement stated. It added that it does not anticipate that tax notices will have any material adverse impact on the financial position or day-to-day business of the company.

Despite the tax update, the company reiterated its robust financial position and operational continuity.

Based in Kolkata, Shree Cement ranks among India’s first three cement producers with an installed capacity of 50.9 million tonnes, including overseas. The company also maintains a presence in the power segment in the form of a 105 MW captive power plant with DG sets and gas-based units, some operating on rental or joint venture models. These facilities have diversified the energy mix of the company.

Although the final determination of the tax case is still pending, Shree Cement holds that it is well-placed to handle the situation without any major disruption in finances.