Ponni Sugars (Erode) Ltd has officially notified the National Stock Exchange and BSE, in accordance with SEBI (LODR) Regulations, 2015, that it received a demand-cum-show cause notice on 28 April 2026 from the Additional Commissioner of Goods and Services Tax (GST) and Central Excise, Coimbatore.

This notice alleges that the company has breached the provisions of the CGST Act, 2017 and TNGST Act, 2017 by improperly availing Input Tax Credit (ITC) concerning its co-generation power plant and certain other services, as well as by neglecting to pay GST on some services.

Through this notice, the tax authority has requested the company to justify why a total demand of approximately Rs. 9.34 crore (Rs. 9,34,68,218), along with applicable interest and penalties, should not be recovered from it. This effectively initiates a legal proceeding in which the company must defend its tax position.

However, the company has firmly stated that it believes the allegations lack legal merit, plans to provide a comprehensive and detailed response to uphold its position, and will seek legal remedies if necessary.

Furthermore, it has reassured investors that, based on its current evaluation, this issue is not anticipated to have any significant financial, operational, or business repercussions on the company at this time, as the notice represents merely a preliminary action and no final liability has been established yet.