GST Show Cause Notice of ₹5,05,21,772 for FY 2022-23 over product classification

Received a GST Show Cause Notice (Form DRC-01) dated 30.09.2026 from the West Bengal GST Authority for FY 2022-23.

Thu 1 Oct 2026

Total Proposed Demand

₹5,05,21,772

Tax Component

₹2,77,88,607

Interest Component

₹1,99,54,307

Penalty Component

₹27,78,858

Product Disputed

Aqua Strong Bond - HSN 3906 (dept.) vs HSN 2309 (company)

What happened

The company informed BSE that it received a Show Cause Notice in Form GST DRC-01 dated 30th September, 2026, issued by the GST Authority, West Bengal, under Section 73 of the WBGST/CGST/IGST Acts. The notice pertains to Financial Year 2022-23 (tax period April 2022 to March 2023).

Amount involved

• Total proposed demand: ₹5,05,21,772
• Tax: ₹2,77,88,607
• Interest: ₹1,99,54,307
• Penalty: ₹27,78,858

The dispute

The department alleges that "Aqua Strong Bond", a product used as an additive binder, should be classified under HSN Code 3906 instead of HSN Code 2309. Under that view, outward supplies treated as non-taxable would attract GST, giving rise to the alleged non-payment.

The company disputes this and maintains that "Aqua Strong Bond" is appropriately classifiable under HSN Code 2309.

Company's position

The company is examining the notice and will submit its response within the prescribed time, and will take the steps available to it under law. It states that a show cause notice is a proposed demand and not a final determination of liability, and that there is no immediate impact on its financials, operations or other activities.

How to read this

A show cause notice is the first stage of a tax proceeding — the authority sets out its view and asks the company to explain. The outcome depends on the adjudication and any further legal steps. For investors, the figure to track is the ₹5,05,21,772 proposed demand, of which interest of ₹1,99,54,307 is a large component, and the eventual classification ruling on the product.

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