Aurobindo Pharma said on Thursday, February 19, that it has received tax demand orders totalling ₹169.83 crore from the Goods and Services Tax (GST) Department over refunds granted earlier to the company, according to an exchange filing.
The total disputed amount includes ₹84.91 crore towards GST and an equivalent penalty of ₹84.91 crore. The company said it received the orders on February 18, 2026.
The demands relate to alleged erroneous refunds of accumulated input tax credit (ITC) under Rule 89 of the CGST Rules for the period September 2022 to December 2022, the filing added.
The orders were passed by the Additional Commissioner of Central Tax, Ranga Reddy GST Commissionerate, Hyderabad, Telangana, under relevant provisions of the Central Goods and Services Tax (CGST) Act, 2017.
According to the exchange filing, the dispute pertains to refund claims made by the company’s EOU Unit 3 for accumulated ITC on zero-rated supplies of goods exported without payment of tax under a Letter of Undertaking (LUT).
The department had earlier sanctioned the refunds after verification and based on the company’s declaration that there were no domestic supplies of the exported goods from the said unit. However, it later challenged the refund sanction orders before the Additional Commissioner (Appeals), Hyderabad, contending that similar products were available in the domestic market and that the refund authority had not factored in the domestic value of such goods while computing the eligible refund.
The appellate authority had ruled in favour of the GST Department in 2023.
According to the exchange filing, Aurobindo Pharma has filed writ petitions before the Telangana High Court challenging the appellate order. The matter is currently pending.
The company also cited a Karnataka High Court ruling in the case of Tonbo Imaging India Pvt Ltd, where the court struck down a similar condition related to refund calculations.
To protect revenue, the GST Department had earlier issued show cause notices for the September–December 2022 period. The department has now confirmed the tax demand, along with interest, and imposed an equal amount as penalty, the filing added.
Aurobindo Pharma stated that it will file an appeal before the Commissioner of Central Tax (Appeals), Hyderabad.
The company added that there is no material impact on its financials or operations due to the orders.
Source from: https://www.cnbctv18.com/market/aurobindo-pharma-faces-rs-170-crore-tax-demand-in-refund-dispute-ws-l-19853829.htm
