DOMS Industries Faces Tax Notice For Subsidiary

The notice alleges a discrepancy in Input Tax Credit (ITC) claimed in GSTR3B versus that accrued in GSTR-2A for the Financial Year 2019-20.

DOMS Industries has announced on its exchange filing that company has received a show cause notice for its subsidiary Micro Wood, from the Office of the State Tax Officer, State Tax Department, Vapi, on account of Mismatch of Input Tax Credit (‘ITC’).

As per the notice, notice is issued alleging Mismatch in ITC claimed in GSTR3B and that accrued in GSTR-2A for the Financial Year 2019-20 as per Scrutiny of GSTR-3B and GSTR-2A amounting to ₹19,82,368 has been demanded for the Financial Year 2019-20 along with interest of ₹16,63,885 and penalty of ₹1,98,236.

The company issued a statement on the notice stating that it is evaluating appropriate legal remedy against the notice and is proposing to file a response to the same within the prescribed time limit. Further, there will be no material impact on the financial, operations and/ or other activities of the company due to the said notice.

The company reported a 29% year-on-year growth in net income to ₹47 crore for the quarter ended March 31, 2024, with net income expanding 40 basis points (bps) to 18.8%.

DOMS Industries is a major player in India’s stationery and art products market, which had a market share of 12% in terms of revenue. The company has several new products, including pencil extensions, rectangular erasers, and rectangular pencils.