GST: Flair Writing Industries Receives SCN for Excess ITC Claim

Flair Writing Industries Limited has issued a regulatory filing to the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), informing them that it has a summary of Show Cause Notice, u/s – 74 of CGST ACT/Rules, 2017 from the Assistant Commissioner of CGST & C.Ex., Div-X, Mumbai East, for wrongly claiming more Input Tax Credit (ITC) than it was allowed for the financial year 2018-19. The company received the show cause notice on June 30, 2025.

The company has issued the regulatory filing under the provisions of Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2023, read with Circular No. SEBI MASTER circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated 11th November, 2024, and SEBI/HO/CFD/CFD-PoD2/CIR/P/2024/185 dated 31.12.2024.

In accordance with the issued show cause notice, the GST department says that the company claimed too much Input Tax Credit (ITC) during that year, and this excess ITC claim is not permitted. In conclusion, the department is asking the company for the reason why this should not be considered a case of wrongful ITC claim.

The department has asked the company to pay a total amount of Rs. 27,54,100, which includes

• Rs. 13,77,050 as the tax that needs to be paid back (because it was wrongly claimed), and
• Rs. 13,77,050 as a penalty (equal to the tax amount) under the law.

Even after receiving the show cause notice, the company has stated that there is no material impact on its financial, operational, and other activities. The impact will only be as much as the final tax amount that needs to be paid, including any interest and penalties, if applicable.

Moreover, the company has stated that it is not satisfied with the notice and is planning to challenge it based on strong merits by way of filing its reply/submissions before the relevant authorities.