Eris Lifesciences Limited has disclosed that it has received a show cause-cum-demand notice amounting to Rs 16.84 crore from the Directorate General of GST Intelligence (DGGI), Mumbai. The notice alleges non-payment of Integrated Goods and Services Tax (IGST) on reverse charge mechanism in relation to the company’s 2019 acquisition of the diabetes drug brand Zomelis from Novartis AG, Switzerland.
The company informed the stock exchanges on August 22, 2025, under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, that the notice pertains to “alleging non-payment of IGST on reverse charge mechanism for import of services. The above-mentioned notice refers to the Company’s acquisition of trademark rights along with the title of ‘Zomelis’ and its associated brands, registered in India, from Novartis AG Switzerland by assignment deed dated November 27, 2019.”
In November 2019, Eris Lifesciences acquired the trademark rights of Zomelis (vildagliptin), a diabetes brand, and its associated Indian registrations from Novartis AG through an assignment deed. The transaction was part of Eris’ portfolio expansion in the anti-diabetic segment.
The DGGI has now alleged that the transfer of these trademark rights amounted to an import of services on which IGST should have been discharged under reverse charge mechanism.
According to the annexure filed by the company, the show cause notice has been issued “under Section 74(1) of the CGST Act, 2017 read with relevant provisions of the State GST Act, 2017 & IGST Act, 2017 and applicable circulars.”
The tax authorities have quantified the demand as follows:
- IGST demand: Rs 168,46,70,40 (approx. Rs 17 crore)
- Applicable interest: 18% per annum from November 27, 2019
- Penalty: Not specified in the notice
Eris clarified that “The Company is of the view that it has complied with the said provisions of the GST laws and has a good case on merits. In case the Company succeeds in these proceedings before the concerned Authorities, the demand will not be upheld.
The pharma company emphasized that it is evaluating the matter in consultation with its tax advisors and will be submitting a detailed reply within the prescribed time frame.
In its disclosure, Eris stated: “The Company maintains a scrupulous record of financial dealings, and contribute towards nation-building as a responsible business. Our compliances are in line with the letter, spirit and intent of the law, and aligned with prevailing industry practices.”
The company reiterated that it does not expect a material financial impact should the matter be decided in its favor, but acknowledged the demand and interest liability raised in the notice.
