On August 29, 2024, Aurobindo Pharma Limited disclosed a significant development regarding its GST obligations. The company received an order from the Deputy Commissioner, Punjagutta (ST) STU-1 of GST, Hyderabad. This order, passed under the relevant provisions of the Central Goods and Services Tax Act, 2017 and the Telangana Goods and Services Tax (TGST) Act, 2017, pertains to the Financial Year 2019-20.

Details of the GST Demand:

The order demands a reversal of Input Tax Credit (ITC) amounting to ₹3,76,30,886, along with interest of ₹2,95,25,296. Additionally, a penalty of ₹37,69,164 has been imposed, bringing the total dispute amount to ₹7,09,25,346. This demand relates to an alleged excess claim of ITC compared to the GSTR 2A and ITC claimed on supplies received from non-filers of GSTR 3B.

Company's Response:

Nature of the Order: The demand involves an alleged excess claim of ITC, leading to the substantial amount in dispute. The company believes that the order is contestable and intends to file an appeal before the Appellate Authority to challenge the decision.

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Date of Receipt: The order was received on August 28, 2024.

Impact on Financials and Operations:

Financial Impact: Despite the substantial amount involved, the company has indicated that there is no material impact on its financials or operational activities. The company's business operations will continue as usual while it addresses the GST demand through the appeal process.

Conclusion:

This development underscores the regulatory challenges faced by companies in managing GST compliance and highlights the ongoing scrutiny by tax authorities. Aurobindo Pharma Limited's proactive approach in contesting the GST demand reflects its commitment to addressing legal and regulatory issues while maintaining operational stability. Stakeholders are advised to follow the company’s official communications for further updates on this matter.

This update is provided in accordance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and reflects the company's adherence to transparency and regulatory compliance.

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