Cable TV
Den Networks disputes Rs 38 crore GST orders, plans legal appeal
MUMBAI: Den Networks Limited has found itself in the middle of a tax showdown, with authorities in Lucknow and Kochi slapping it with two Goods and Services Tax (GST) penalties totalling nearly Rs 38 crore. The company, however, has strongly refuted the allegations, calling the orders erroneous and confirming plans to file appeals against them.
Dismissing both allegations, Den Networks has reiterated that these tax demands do not impact its day-to-day operations, and that the financial exposure is limited to the penalty amounts. The company remains confident of a favourable outcome in the appeals process. With a legal battle looming, the GST dispute is far from settled Den Networks is preparing to make its case, challenging the tax authorities’ interpretation in an attempt to reverse the penalties and clear its name.
The first order, issued by the CGST and Central Excise Commissionerate, Lucknow, on 31 January 2025, imposed a penalty of Rs 4.75 crore under Section 74 of the Central Goods and Services Tax Act, 2017 and the Uttar Pradesh Goods and Services Tax Act, 2017. Tax authorities claimed that Den Networks had wrongfully adjusted deferred revenue for FY 2017-18, allegedly leading to lower GST payments. The company insists this assessment is incorrect.
The second order, passed by the CGST Kochi Commissionerate on 3 February 2025, demanded a staggering Rs 33.25 crore in differential tax, along with an equal penalty amount under Section 122(2)(b) read with Section 74(9) of the Central Goods and Services Tax Act, 2017, and corresponding Sections of the Kerala State Goods and Services Tax Act, 2017, for the period from July 2017 to March 2022. The dispute centres on how GST should be applied—tax authorities argue it should be charged on the total amount collected by local cable operators (LCOs) from subscribers, rather than on the revenue received by Den Networks from LCOs. The company maintains that it has calculated and discharged GST correctly as per regulatory norms.
MUMBAI: When margins wobble, liquidity talks and in Q3 FY25-26, cash did most of the talking. Den Networks Limited closed the December quarter with consolidated revenue of Rs.251 crore, marginally higher than the previous quarter but down 4 per cent year-on-year, even as profitability stayed resilient on the back of strong cash reserves and disciplined cost control.
Subscription income softened to Rs.98 crore, slipping 3 per cent sequentially and 14 per cent from last year, while placement and marketing income offered some cheer, rising 15 per cent quarter-on-quarter to Rs.148 crore. Total costs climbed faster than revenue, up 7 per cent QoQ to Rs.238 crore, driven largely by higher content costs and operating expenses. As a result, EBITDA dropped sharply to Rs.13 crore from Rs.19 crore in Q2 and Rs.28 crore a year ago, pulling margins down to 5 per cent.
Yet, the bottom line refused to blink. Profit after tax stood at Rs.40 crore, up 15 per cent sequentially and only marginally lower than last year’s Rs.42 crore. A healthy Rs.57 crore in other income helped cushion operating pressure, keeping profit before tax at Rs.48 crore, broadly stable quarter-on-quarter despite the tougher cost environment.
The real headline-grabber, however, sits on the balance sheet. The company remains debt-free, with cash and cash equivalents swelling to Rs.3,279 crore as of December 31, 2025. Net worth rose to Rs.3,748 crore, while online collections accounted for 97 per cent of total receipts, underscoring strong cash discipline across operations, including subsidiaries.
In short, while Q3 showed signs of operating strain, the financial backbone remains solid. With zero gross debt, steady profits and a formidable cash war chest, the company enters the next quarter with flexibility firmly on its side proving that in uncertain markets, balance sheet strength can be the best growth strategy.
