Sapphire Foods shares fell more than 3 % on Monday, 28 September, after the company received a ₹20 crore goods and services tax (GST) show‑cause notice from the Deputy Commissioner of Karnataka. The notice demanded ₹19.99 crore for alleged incorrect availment and utilisation of input tax credit (ITC) and short payment of tax for the period April 2022 to March 2023. Investors reacted sharply, sending the stock lower as the company announced the tax demand update over the weekend.

NSE data showed Sapphire Foods’ stock dropped 3.2 % to touch an intraday low of ₹216.42 on Monday’s market, compared to ₹223.61 at the previous equity market close. The shares ended 0.9 % lower at ₹223.61 after Friday’s session, versus ₹225.70 at the prior close. The 52‑week high of ₹313 was reached on 25 September 2025, while the 52‑week low of ₹139.91 occurred on 2 April 2026.

In an exchange filing on Saturday, 26 September, Sapphire Foods disclosed that the Karnataka authorities had issued a GST show‑cause notice demanding ₹19.99 crore for alleged incorrect availment and utilisation of ITC and short payment of tax for April 2022 to March 2023. The company said it was evaluating the demand and would take necessary steps to respond. It added that the claim was not maintainable and that the notice would not materially impact its financial, operational or other activities.

Last week, on 22 September, the company received two notices amounting to a total tax demand of ₹538 crore for alleged inadvertent availment and utilisation of ITC, short payment of interest and tax. Over the past year, Sapphire Foods shares have declined by more than 27 % of their value, and by over 22 % in the last three years. On a year‑to‑date basis, the stock has lost 16 % of its value so far in 2026, and has dropped 5.6 % in the last one‑month period.

The company’s market capitalisation was ₹7,017 crore as of the stock market session on Monday, 28 September 2026. The shares have lost 8.3 % in the last five market sessions and 5.6 % in the last month. Investors are monitoring the situation closely as the company prepares to respond to the Karnataka authorities’ demand. The notice, issued by the Deputy Commissioner, DGSTO‑4, Bengaluru, highlights the importance of accurate ITC utilisation and tax compliance for firms operating in the state.