Religare Enterprises shares trade down on Rs 40-cr GST demand notice

Shares of Religare Enterprises dropped nearly 1 percent in early trade on January 2, after a subsidiary was issued a GST demand of Rs 39.51 crore from CGST, Central Excise Commissionerate, Chandigarh. At 9:15am, the stock was trading at Rs 216.24 on the NSE.

Religare Enterprises subsidiary Care Health Insurance (CHIL), faced an order from the Principal Commissioner of Central Goods and Service Tax and Central Excise Commissionerate of Chandigarh. The order, issued under the Central Goods and Services Tax Act, entails a tax demand of Rs 35.92 crore. A penalty of Rs 3.59 crore and applicable interest were added to it.

This development presents a financial challenge for CHIL, as the tax demand, penalty, and interest collectively amounting to a significant sum.

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Religare Enterprises, as the parent company, may need to address or navigate the implications of this order on its subsidiary’s financial standing. Such regulatory matters can impact the financial health of companies, necessitating careful consideration and strategic decisions by the entities involved.

Further, the company informed in the exchange filing with BSE on January 1, that based on the advice of Tax Consultants, CHIL would be filing an appeal against the said order before an appropriate forum within the prescribed timelines.

Stock performance

The Religare Enterprises stock has given a return of 23.25 percent over the last six months. The benchmark Nifty50 index has given a return of 12.52 percent over the same duration.

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