"We have today filed with Sebi our communication conveying that the increase in the amount of buyback obligation due to the tax proposal in the Finance Bill 2019 was neither contemplated nor prevailing at the time of the consideration and the approvals of the board and shareholders," the company said in a press release.
"The company is not permitted to meet the buyback obligations beyond the amount approved by the board of directors and shareholders and the same can also be effected only with the borrowed funds, which is prohibited by law, it said.
With a view to discourage the practice of avoiding dividend distribution tax (DDT) through buyback of shares by listed companies, Union Finance Minister Nirmala Sitharaman last week proposed an additional tax of 20 per cent in case of buyback of shares by listed companies.
Exemption enjoyed by the shareholder of a listed company on income arising on account of buyback of shares has been withdrawn with effect from July 5, 2019.
At 09:37 am, KPR Mill
was trading 4 per cent lower at Rs 585 on the BSE, as compared to a marginal 0.01 per cent rise in the benchmark index. A combined 76,672 shares have changed hands on the counter on the BSE and NSE so far.