Aurobindo Pharma Limited to Challenge GST Order Requiring Reversal of Input Tax Credit Worth ₹7 Crores

Hyderabad, India – August 29, 2024:
Aurobindo Pharma Limited [BSE: 524804, NSE: AUROPHARMA], a leading global pharmaceutical manufacturer, has announced its intent to appeal against a recent order issued by the Deputy Commissioner of GST, Punjagutta Division, Hyderabad. The order, dated August 28, 2024, demands a reversal of Input Tax Credit (ITC) and payment of Goods and Services Tax (GST) amounting to a total of ₹7,09,25,346 for the financial year 2019-20.

Details of the Order and Allegations

The order, issued under the Central Goods and Services Tax Act, 2017 and the Telangana Goods and Services Tax (TGST) Act, 2017, cites the following allegations:

Reversal of Input Tax Credit (ITC): The company has been directed to reverse an excess ITC claim amounting to ₹3,76,30,886.

Interest and Penalty: An interest of ₹2,95,25,296 has been levied along with a penalty of ₹37,69,164, bringing the total disputed amount to ₹7,09,25,346.

Basis of Allegation: The order alleges discrepancies in the ITC claims of the company compared to GSTR 2A and ITC claimed on supplies from non-filers of GSTR-3B.

Company’s Response and Next Steps

In response to the order, Aurobindo Pharma has confirmed its intention to file an appeal before the Appellate Authority. The company believes that it has grounds to challenge the order and will proceed with legal recourse to contest the claims made by the GST department.

Aurobindo Pharma has stated that there is no material impact on the company’s financials or operational activities due to this order. The management reassures shareholders and stakeholders that it remains confident in its position and will continue to comply with all applicable laws and regulations.

Impact on Financials and Operations

Despite the demand for reversal of ITC and associated penalties, Aurobindo Pharma has confirmed that the order does not pose any material impact on its financials or day-to-day operations. The company maintains a robust compliance framework and routinely addresses regulatory challenges in line with industry norms.

The decision to appeal reflects Aurobindo Pharma’s commitment to safeguarding its interests and ensuring fair treatment under the law. The company is actively preparing its case for submission to the Appellate Authority and will keep the public informed of any significant developments.

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About Aurobindo Pharma Limited

Aurobindo Pharma Limited is one of India’s largest pharmaceutical companies, recognized globally for its high-quality, affordable medicines. Established in 1986 and headquartered in Hyderabad, India, the company operates across key therapeutic segments, including antibiotics, anti-retrovirals, cardiovascular products, and gastroenterologicals. Aurobindo Pharma has a strong global presence with a diversified product portfolio and robust pipeline of generic and branded pharmaceuticals.

The company’s corporate philosophy is built on a foundation of innovation, quality, and customer focus, with operations spanning across over 150 countries. Aurobindo Pharma continues to invest in its infrastructure, technology, and people to deliver sustained growth and create long-term value for its stakeholders.

Outlook and Future Developments

As Aurobindo Pharma prepares to challenge the GST order, it remains committed to its broader strategic goals, including expanding its product portfolio, strengthening its market position, and driving growth in both domestic and international markets. The company’s leadership is confident that the outcome of this appeal will be favorable and will help clarify its compliance stance.

Stakeholders are encouraged to stay informed through official updates from the company regarding the progress of the appeal. Aurobindo Pharma continues to work closely with regulatory authorities to ensure transparency and compliance in all its dealings.

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Conclusion

While the GST order presents a challenge, Aurobindo Pharma’s proactive approach in appealing the decision demonstrates its dedication to upholding its reputation for compliance and integrity. The company’s assurance of no material impact on its financials or operations provides confidence to investors, customers, and partners.

Aurobindo Pharma remains steadfast in its mission to provide high-quality pharmaceutical products to markets worldwide, ensuring that its operations are always aligned with its core values of excellence, integrity, and accountability.

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