Mumbai, February 5, 2025 – DEN Networks Limited (BSE: 533137, NSE: DEN) has disclosed a significant tax demand order issued by the Joint Commissioner (ADJN), Central Tax and Central Excise, CGST Kochi Commissionerate, amounting to ₹33.26 crore, including penalties and interest.
Key Highlights:
- Order Date: February 3, 2025
- Tax Demand: ₹33.26 crore
- Regulatory Reference: Section 122(2)(b) read with Section 74(9) of the CGST Act, 2017, and corresponding sections of the Kerala SGST Act, 2017.
- Period Covered: July 2017 – March 2022
- Basis of Demand: Tax authorities claim that the tax should have been levied on the gross amount charged by Local Cable Operators (LCOs) from subscribers, rather than the amount charged by DEN Networks to the LCOs.
Company's Response & Next Steps
DEN Networks has strongly contested the order, calling it erroneous and has announced its intention to file an appeal. The company maintains that this demand does not have a material impact on its operations.Financial & Operational Impact
- The financial impact of the demand is limited to the tax amount stated.
- The company asserts that there will be no disruption in operations or other business activities.
Investor Outlook
While the financial burden is notable, DEN Networks’ decision to appeal suggests that it does not expect an immediate financial liability. Investors will closely watch the legal proceedings and any potential impact on the company's balance sheet.The company received the official intimation of the order on February 4, 2025, at 09:51 a.m. IST via email.
This development is crucial for stakeholders, as it underscores potential regulatory risks in the cable and broadband services sector. Further updates will depend on the outcome of DEN Networks' appeal.