According to the latest disclosure, Sapphire Foods now faces combined GST demands totaling ₹716.74 crore for the fiscal year April 2022 to March 2023. The ₹199.90 crore notice from Karnataka authorities issued on September 25, 2026, under Section 73 of the Karnataka GST Act 2017, represents 28% of the total exposure. This follows a separate ₹516.84 crore notice from Tamil Nadu authorities for the same period, which constitutes approximately 72% of the total exposure. Both authorities cite similar grounds: inadvertent or incorrect ITC utilization and short payment of tax.
According to the latest exchange filing, Sapphire Foods disclosed that Karnataka authorities have issued a ₹199.90 crore GST show-cause notice for alleged incorrect availment and utilisation of input tax credit (ITC) and short payment of tax for the period April 2022 to March 2023. The notice was issued by the Deputy Commissioner, DGSTO-4, Bengaluru, Karnataka, on September 25, 2026. The company clarified that the aggregate amount stated in the notices contains computational errors regarding tax, interest, and penalty. As reported by the company, the claim made by the authority is not maintainable, with no material impact on the financial, operational, or other activities of the company due to the issuance of this notice.
This latest notice adds to the company's tax-related challenges, as reported by the company. Last week on September 22, Sapphire Foods received two notices amounting to a total tax demand of ₹538 crore for alleged inadvertent availment and utilisation of ITC, short payment of interest and tax. The company stated that it is evaluating the demand and will take necessary steps to respond to the notices. Management is currently evaluating the latest Karnataka notice and will take necessary steps to respond appropriately.
According to NSE data, Sapphire Foods shares ended 0.9% lower at ₹223.61 apiece after Friday's market session, compared to ₹225.70 at the previous equity market close. The stock has experienced significant declines over longer periods, with more than 23% decline in the last three years and over 17% drop in the past one-year period. On a year-to-date basis, the company's stock has lost 15% of its value in 2026 and dropped 10.7% in the last one-month period. The company's market capitalisation stood at ₹7,186 crore as of the stock market close on Friday, September 25, 2026.
The company's shares have shown significant volatility in recent months, with NSE data showing that Sapphire Foods shares hit their 52-week high of ₹313 apiece on September 25, 2025, while the 52-week low was at ₹139.91 apiece on April 2, 2026. The stock has also lost 3% in the last five market sessions, indicating continued pressure on the shares amid the ongoing tax-related developments. Historical stock returns show mixed performance with -0.93% in one day, -4.13% in 5 days, -10.30% in one month, +41.13% in 6 months, and -27.36% in one year.
