Grasim gets partial relief in tax dispute case on demerger of fin biz

1 Jul 2022

Grasim Industries Ltd has got partial relief from the Income Tax Dispute Resolution Panel in a capital gains case pertaining to shares issued to its shareholders when it had demerged its financial services business in 2017-18 (Apr-Mar).

The company said in a stock exchange filing today that an order passed by the tax dispute resolution body on Thursday “rejecting various objections of the Company and in partial relief allowed objection in the matter of Capital Gain Tax on the value of shares issued to the shareholders of the Company on demerger of Financial Services Business.”

On Sep 30 the Income Tax Department had issued an order adding capital gains tax claim on Grasim to its earlier claims in the demerger case. The company had, on Oct 1, said that the additional tax demand was estimated to be 83.3 bln rupees.

The company subsequently appealed against this order to the Dispute Resolution Panel which gave its ruling on Thursday. The Income Tax Department will have to quantify Grasim’s tax liability for 2017-18 based on the Panel’s ruling, Grasim said in its filing.

In 2017-18, Grasim’s consolidated profit before tax was 56.3 bln rupees and total tax expenses amounted to 19.5 bln rupees, data from Informist Corporate Fundamental Database showed.