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Informist, Thursday, Feb. 19, 2026

--Aurobindo Pharma: Received demand from GST authority of INR 1.70 bln 

MUMBAI – Aurobindo Pharma Ltd. has received a demand from the Ranga Reddy goods and services tax commissionerate to pay INR 1.70 billion towards GST and interest of INR 849.18 million and penalty of equivalent amount. The tax department said the pharmaceutical company was erroneously granted refund of accumulated input tax credit under Rule 89 of the Central GST Rules for the period Sept-Dec 2022.

The 2022 orders were passed on refund claims by the company's export-oriented unit 3 for accumulated input tax credit in respect of zero-rated supply of goods made without payment of tax under a letter of undertaking. The department sanctioned the refunds after verification and considering the company's declaration that there was no domestic supply of exported goods from the unit.

Later, however, the department challenged refund sanction orders for the period from December 2021 to March 2023 before the appellate deputy commissioner (appeals), Hyderabad, on the basis that there were similar products in the domestic market from other manufacturers and the refund sanctioning authority had not considered their value when allowing the refund.

The appellate authority passed an order-in-appeal in the department's favour. The company has filed a writ petition against the order in the Telangana High Court. The petition also challenges the validity of Rule 89(4)(C) of the CGST Rules.

Following the order-in-appeal, the GST department, to safeguard its revenue, issued demand show-cause notices for Sept-Dec 2022. Aurobindo Pharma replied that it does not make domestic supplies of goods from its export-oriented unit 3, and only scrap from the unit is sold within the country. Even if the value of goods available in the domestic market is considered, the eligible input tax credit refund will not significantly affect the refund that has already been given, the company said.

The tax department, however, did not consider the reply and confirmed the demand along with the interest, imposing an equal penalty. Aurobindo Pharma said it would file an appeal before the commissioner of central tax (appeals), Hyderabad.

The company reported, on a consolidated basis, a net profit of INR 9.10 billion for the December quarter on a revenue of INR 86.46 billion. Thursday, its shares ended 1% higher at INR 1,171.40 on the National Stock Exchange.  End

Reported by Arundathi A R

Edited by Rajeev Pai

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