The stock of Sheela Foam Limited, the maker of popular mattress brand Sleepwell, slumped over 4 percent to Rs 1,062 in early trade on October 5 after the company received a show-cause-cum-demand notice from the commissioner of goods and services tax (GST) intelligence in Gautam Budh Nagar.
The notice, issued under section 16 of the Central Goods and Services Tax Act, 2017, claims a tax demand of Rs 20.26 crore, coupled with an equivalent penalty of the same amount, in addition to applicable interest on the said demand, the company said.
At 9:21 am, shares were trading at Rs 1,093, down nearly 1.5 percent from the previous close on the NSE. The company's market cap is over Rs 12,000 crore.
The investigation primarily revolves around the alleged improper utilisation of transitional input credit and other instances of incorrect input tax credit claims associated with the GST.
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The company has been asked why GST, totalling Rs 20.26 crore, should not be collected in accordance with Section 16 of the Central Goods and Services Tax Act, 2017. It also proposes a penalty of Rs 20.26 crore along with interest.
"The company will be filing an appropriate response to the said show cause cum demand notice within the prescribed timelines," the maker of popular mattress brand Sleepwell said in an exchange filing on October 4.
On October 4, Winro Commercial India offloaded Sheela Foam shares worth Rs 93 crore through an open market transaction.
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According to the block deal data available with the National Stock Exchange (NSE), Winro Commercial India sold more than 8.34 lakh shares at an average price of Rs 1,114 apiece.
The stock, which closed over 2 percent lower at Rs 1,103.20 on October 4, has tanked 14 percent this year.
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