Hindustan Zinc Challenges ₹1,884 Crore Tax Demand from NFAC

29 Jul 2024 , 10:51 AM

Vedanta Group company Hindustan Zinc Ltd announced on Friday (July 26) that it received an order from the Assessment Unit of the Income Tax Department’s National Faceless Assessment Centre (NFAC) on July 25, 2024, imposing a tax demand of ₹1,884 Crore. The company has contested this demand, stating that it has been incorrectly calculated.

Hindustan Zinc Ltd filed a rectification application on July 26, 2024, to correct the errors in the tax demand. The company highlighted that the NFAC’s assessment did not account for pre-paid taxes and taxes paid under regular assessment, and included clerical and arithmetic mistakes.

At the time of writing on July 29, 2024 at 10:42 am, shares of Hindustan Zinc is currently trading at ₹617 which is a 2.39% gain than the previous close. Hindustan Zinc stock has witnessed a total of 91% gain in the last one year, and 94% gain since the beginning of the year.

The erroneous tax demand was issued under sections 147, 144C(3), and 144B of the Income Tax Act, 1961, and was received on July 25, 2024, at 9:08 PM. In response, Hindustan Zinc promptly sought rectification under section 154 of the Income Tax Act to ensure an accurate assessment.

Hindustan Zinc has stressed its commitment to full tax compliance and is confident that the rectification application will lead to a favorable outcome. The company believes that the incorrect demand will be revised to reflect a tax liability of NIL, ensuring no material financial impact.

Hindustan Zinc Limited (HZL) is an integrated mining and resources producer of zinc, lead, silver, and cadmium. It is a subsidiary of Vedanta Limited and was formerly a Central Public Sector Undertaking, sold to Vedanta Limited in 2003. HZL is the world’s second-largest zinc producer.