In a regulatory filing dated 24th April 2025, Sanofi India Limited disclosed a demand order issued by the Commissioner of Central GST & Central Excise, Vadodara II, involving a substantial tax and penalty demand of ₹5.25 crore each, totaling ₹10.51 crore, under the CENVAT credit framework. This order was communicated to the company on 23rd April 2025, and the company has stated its intention to file an appeal against the ruling.

The issue originates from a remanded matter by CESTAT (Customs, Excise and Service Tax Appellate Tribunal), which had sent the case back to the Commissioner for reassessment regarding reversal of CENVAT credit claimed by the company on inputs used for both exempt and non-exempt products. Upon review, the Commissioner confirmed that Sanofi India failed to fully demonstrate appropriate credit reversal, leading to the confirmation of the demand of ₹5,25,70,852, along with an equivalent penalty amount.

As per Sanofi’s disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the alleged violation pertains to common input credit reversal obligations under the indirect tax regime. Despite the penalty and demand amount, Sanofi India clarified that this development does not have any material financial or operational impact on the company’s functioning.

The company has reiterated its commitment to tax compliance and good governance, and it is exploring all legal remedies available, including a formal appeal process that will be initiated shortly.

This incident underscores the ongoing scrutiny by tax authorities over the usage and declaration of input tax credits, particularly in sectors dealing with both exempt and non-exempt goods. While Sanofi India has not disclosed specifics on the financial provisioning for this order in the filing, it has clearly stated that the impact is not material in terms of its financials.

This update was duly notified to both BSE (Scrip Code: 500674) and NSE (Symbol: SANOFI). The communication was signed by Mr. Rachid Ayari, Whole-time Director and Chief Financial Officer of Sanofi India Limited.

This order is a part of routine tax administration, and Sanofi India’s prompt response reflects its proactive disclosure and adherence to regulatory norms.

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