HP Adhesives faces ₹2.91 crore GST demand over alleged tax dues

HP Adhesives Limited announced on September 27, 2025, that it received a Show Cause Cum Demand Notice (SCN) from the Additional Commissioner, CGST Audit-II Commissionerate, Mumbai. The notice, issued under Section 74(1) of the Central Goods and Services Tax Act, 2017, ascertains GST dues totaling ₹2,91,75,420, along with applicable interest and penalties, covering the period from FY 2019-20 to 2023-24.

Alleged violations detailed in Annexure A include non-reversal of Input Tax Credit (ITC) for IPO expenses (Tax ₹2,83,85,245), availment of blocked ITC (Tax ₹2,67,154), non-payment of Reverse Charge Mechanism (RCM) on foreign bank charges (Tax ₹96,397), and non-distribution of proportional ITC for common expenses (Tax ₹4,26,624).

HP Adhesives intends to file a detailed reply with facts and justifications to the GST Authorities. The company believes it has adequate legal grounds to substantiate its position and does not anticipate any material impact on its financial, operational, or other activities due to this order.