Mumbai — Rashtriya Chemicals and Fertilizers Limited (RCF), a state-owned fertilizer and chemicals manufacturer, has received a tax demand notice of approximately ₹4.36 crore ($520,000 USD) from India’s Income Tax Department, the company disclosed in a regulatory filing on Friday.
The company, however, reassured investors that it does not expect any financial impact, stating that the demands are “erroneous” and already under challenge through appeals and rectification applications.
Breakdown of Tax Demand
The total demand of ₹4,36,49,106 spans three assessment years:
- AY 2020–21: ₹19.11 lakh
- Nature: Penalty on education cess claimed
- Status: Rectification filed; appeal pending
- AY 2021–22: ₹2.14 crore
- Nature: Penalty on disallowed adjustments
- Status: Appeal pending
- AY 2023–24: ₹2.03 crore
- Nature: Alleged incorrect disallowance
- Status: Rectification application in process
All appeals are currently pending before the Commissioner of Income Tax Appeals.
Company Response
In its official statement, RCF said:
“The order demands the Company to pay ₹4,36,49,106. However, the matters are already pending before appellate authorities, and rectification applications have been filed.”
The company emphasized that:
“No future monetary outflow is anticipated, as the underlying demands are erroneous and are expected to be deleted or rectified.”
Appeals Already in Progress
RCF clarified that it had already initiated legal action prior to receiving the latest demand notice:
- Appeal for AY 2020–21 filed in March 2023
- Appeal for AY 2021–22 filed in July 2023
- Rectification process underway for AY 2023–24
This indicates that the disputes are part of an ongoing tax litigation process, rather than a new liability.
Regulatory Disclosure
The company disclosed the development under SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015, ensuring transparency for investors.
The filing was signed by J. B. Sharma, Executive Director (Legal & Company Secretary) of Rashtriya Chemicals and Fertilizers Limited.
Market Implications
While tax disputes can sometimes weigh on investor sentiment, RCF’s clear statement that no financial outflow is expected is likely to limit any negative market reaction.
Market participants will continue to monitor the progress of the appeals and any rulings from tax authorities.
About RCF
Rashtriya Chemicals and Fertilizers Limited is a Government of India undertaking under the Ministry of Chemicals and Fertilizers. Established in 1978, the company is a key player in India’s agricultural sector, producing:
- Urea and complex fertilizers
- Industrial chemicals
RCF operates major manufacturing units in Trombay (Mumbai) and Thal (Raigad), contributing significantly to India’s fertilizer supply and agricultural productivity.