Pine Labs reports Rs 310 crore GST exposure in DRHP, appeals pending
As Pine Labs gears up for its domestic IPO, the company is navigating a slew of regulatory and tax hurdles, including a confirmed Rs 214.11 crore GST demand and continued scrutiny from the Enforcement Directorate (ED), as per disclosures in its Draft Red Herring Prospectus (DRHP) dated June 25.
The most material issue involves a tax demand from the Directorate General of GST Intelligence (DGGI), Mumbai. In August 2024, the department issued a show cause notice over the denial of input credit on co-branding, e-commerce product listings, and advertising expenses linked to gift card sales between July 2017 and March 2024.
“In August 2024, the Directorate General of Goods and Services Tax Intelligence (“Department”), Mumbai issued a show cause notice… alleging the non-availability of GST credit on co-branding services, product listing fees on e-commerce marketplace and advertisement expenses from the period July 2017 to March 2024 incurred in relation to sale of gift cards amounting to Rs 2,141.11 million (excluding interest and penalty),” said the DRHP.
While the company responded to the notice in December 2024, the Joint Commissioner, Bangalore passed an order in February 2025, confirming the entire demand of Rs 2,141.11 million (Rs 214.11 crore).
In addition, the company reported, “The management has estimated interest liabilities of Rs 955.75 million (Rs 95.57 crore) as of 31 December 2024 on the above matters.”
