Hindustan Zinc disclosed on Friday that it has received a goods and services tax (GST) notice from the Principal Commissioner, Central Excise & CGST Commissionerate, citing an "interpretational issue." The company is directed to pay Rs 12.7 crore for GST, coupled with a hefty 100% penalty and applicable interest, covering the period from July 2017 to March 2018.
In response to the notice, Hindustan Zinc clarified in a regulatory filing that it anticipates no significant financial impact and intends to file an appeal against the order. "Considering the merits of the case, the company intends to file an appeal before the Appellate Authority within the time-limit prescribed under the GST Law," the filing stated. The company expressed optimism about a favorable outcome and stressed that the order is unlikely to have any material financial repercussions.
The Hindustan Zinc board is slated to convene on January 19 to approve and announce financial results for the October-December quarter and the nine months ending December 31, 2023. Despite the ongoing GST matter, the company is focused on maintaining business operations and ensuring shareholder returns.
Last month, the board approved a second interim dividend of Rs 6 per share for the fiscal year 2023-24, totaling Rs 2,535.19 crore. This decision followed the announcement of a first interim dividend of Rs 7 per share in July of the previous year. The company's commitment to shareholder value is evident, even amidst regulatory challenges.
Hindustan Zinc, recognized as the world's second-largest integrated zinc producer and the fifth-largest silver producer, continues to navigate regulatory hurdles while sustaining its market position. As of Friday morning, its shares were trading flat at Rs 317.15 apiece on the BSE, reflecting resilience in the face of the GST notice and underscoring investor confidence in the company's long-term prospects. The upcoming board meeting is expected to shed further light on the financial implications and the company's strategy moving forward.
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