Kansai Nerolac Paints faces ₹66.71 lakh GST penalty over input tax credit

Kansai Nerolac Paints (NSE: KANSAINER) has received a penalty order under Section 74 of the Central Goods and Services Tax Act, 2017, imposing ₹66.71 lakh on the company, it said in a filing on 05 Nov 2026. The order was passed by the Assistant Commissioner, Central GST and CEX, Division II, Raipur.

What the order is about

The order was passed by the Assistant Commissioner, Central GST and CEX, Division II, Raipur, and the company received it on 05 Nov 2026. The demand arises for the State of Chhattisgarh, mainly from a partial disallowance of input tax credit claimed during FY 2020-21 to 2023-24.

Input tax credit is the tax paid on goods and services bought for business that a company may set off against the tax it owes on its own sales. The disallowance means part of the credit claimed in those years was not accepted by the tax authority.

The company's response

The company says the order was passed on a wrong understanding of the facts and that it has relevant records to prove its claims. It is in the process of filing an appeal.

The company says there is no material impact on its financials, operations or other activities. Its Q1 FY27 consolidated total income was ₹2,428.53 crore, so the penalty is small against the group's reported scale.

What the penalty order means for Kansai Nerolac Paints' shareholders

The penalty is ₹66.71 lakh, and the company says it does not expect a material impact. The company's stated position is that the order rests on a misreading of the facts and that it will appeal.

The filing does not state the date of the order itself, the total disputed input tax credit beyond the penalty, or the date by which the appeal must be filed. The outcome of the appeal is not known.

At a glance