How material is this GST demand to Southern Magnesium?

Very material. The ₹30.32 lakh demand compares to FY26 PAT of ₹12.64 lakh, far exceeding annual profit.

What is the basis of the demand?

Alleged short payment of output tax between April 2025 and February 2026.

What has the company said?

It believes it has a strong case on merits and does not expect financial impact.

What is the next step?

The company will respond to the notice; adjudication under Section 74A will follow.

How does this affect the company's financials if upheld?

The demand of ₹30.32 lakh plus potential penalty could wipe out more than a year's profit. The company denies impact for now.

Metal - Non Ferrous · Micro cap

Southern Magnesium faces ₹30 lakh GST notice, exceeds annual profit

The demand for alleged short payment of output tax over 10 months is material for the nano-cap. Its entire FY26 profit was just ₹12.6 lakh.

SOUTHMG By Tipsheet Editorial 18 Jun 2026 · 3:31 PM IST Verify on BSE · NSE

Mkt cap₹23.98 cr

P/E190.36×

ROE24.75%

Debt / eq.0.25

₹30.32 lakh GST demand notice, exceeds FY26 PAT of ₹12.64 lakh

What's new

GST demand of ₹30.32 lakh for alleged short payment of output tax (Apr '25 to Feb '26).
Company says it has a strong case and no financial impact expected.
Notice issued under Section 74A(9)(i) of CGST/AP GST Act.

Why this matters

For a nano-cap with ₹12.64 lakh in annual profit, a ₹30 lakh tax demand is existential, regardless of legal merits. The company's assertion of no impact is at odds with the numbers: the demand alone exceeds two years of profits.

What we're watching

Outcome of the adjudication under Section 74A.
Any provision the company may set aside in upcoming results.
Whether similar notices for other periods emerge.

The full read

Southern Magnesium & Chemicals, a nano-cap with a market cap of ₹24 crore, has received a GST demand of ₹30.32 lakh for alleged short payment of output tax. The notice covers April 2025 to February 2026 and was issued under Section 74A(9)(i). The company says it has a strong case and expects no financial impact. But the demand is material: compare it to FY26 PAT of just ₹12.64 lakh. For a business that size, a tax notice this large is an overhang regardless of legal outcome. The next quarter's results will show if management provisions anything.

Questions answered

How material is this GST demand to Southern Magnesium?: Very material. The ₹30.32 lakh demand compares to FY26 PAT of ₹12.64 lakh, far exceeding annual profit.
What is the basis of the demand?: Alleged short payment of output tax between April 2025 and February 2026.
What has the company said?: It believes it has a strong case on merits and does not expect financial impact.
What is the next step?: The company will respond to the notice; adjudication under Section 74A will follow.
How does this affect the company's financials if upheld?: The demand of ₹30.32 lakh plus potential penalty could wipe out more than a year's profit. The company denies impact for now.

Mentioned: Deputy Assistant Commissioner (ST) · ₹30.32 lakh GST demand · Section 74A

Primary source BSE · NSE

An independent reading of the company's own disclosure — the primary filing above is the final word.