What’s new

• CGST issued a show cause notice demanding ₹16.56 cr for FY2022-23 over HSN code misclassification.
• The amount is 22.5% of Gopal's ₹73.7 cr FY26 net profit.
• Gopal has secured Gujarat High Court stays on similar notices for prior years and will contest this one.

Why it matters

A tax demand equal to over a fifth of annual profit is significant. But Gopal has a playbook: it has obtained stays from the Gujarat High Court on identical claims for earlier years. The company says it expects no material financial hit, pointing to that legal precedent.

What we’re watching

• Whether the Gujarat High Court grants another stay on this specific notice.
• The timeline for final resolution of the HSN classification dispute.
• Any similar notices from other tax authorities on the same product category.

The full read

Gopal Snacks received a ₹16.56 crore demand from the CGST over how it classifies fried fryums for tax purposes. That sum equals 22.5% of the company's ₹73.7 crore FY26 profit. The company isn't paying yet. It has won Gujarat High Court stays on identical demands for past years, and it plans to contest this notice on the same grounds. Management asserts no material impact on operations. The fight is over HSN codes—a technicality that can carry a seven-figure price tag. While the precedent favors Gopal, each new notice adds another layer of legal cost and uncertainty.

Primary source: BSE · NSE