The company states that the claim made by the authority is not maintainable and there is no material impact on the financial, operation or other activities of the company due to the issuance of this order
On account of utilisation of eligible Input tax credit against output tax liability of central goods and service tax (CGST) and State GST (SGST), Sapphire Foods, which operates KFC and Pizza Hut, has received a demand notice of Rs 81.45 lakh from GST authorities from Karnataka.
“This is to inform you that the Company has received a Demand order from Deputy Commissioner of Commercial Taxes, (Audit)-4.1, DGSTO-4, Bengaluru, Karnataka. The Company has received an order from the aforesaid Authority levying demand of Rs 81.45 lakh (including interest – Rs 35.68 lakh and Penalty – Rs 4.16 Lakhs) on account of utilisation of eligible Input tax credit against output tax liability of CGST and SGST,” the company stated in an exchange filing.
GST Authorities from Karnataka have disallowed utilisation eligible input tax credit against output tax liability of CGST and SGST. The Company received demand order on 6th January 2025. It added that the claim made by the authority was not maintainable and there was no material impact on the financial, operation or other activities of the company due to the issuance of this order.
“Further, the company is in the process of evaluating the order and shall take necessary steps to respond to the demand order including challenging the said order at relevant appellate forums,” as per the statement.
On 7th January 2025, the company decided to close the remaining two operational stores [one KFC and one Pizza Hut] of Gamma Island Food, a subsidiary of the Company, situated in Maldives. It stated that due to continuous operational losses incurred by stores at Maldives, it was found prudent to close the stores operated by Gamma Maldives.
