Aurobindo Pharma Slapped Rs 170 Crore GST Demand

Hyderabad: Aurobindo Pharma Limited has informed that the Goods and Services Tax Department has passed orders demanding recovery of refunds earlier granted to the company, with the total disputed amount standing at Rs 169,83,61,326, including tax and penalty.

The orders have been issued by the Additional Commissioner of Central Tax, Ranga Reddy GST Commissionerate, Hyderabad, Telangana, under the relevant provisions of the Central Goods and Services Tax (CGST) Act, 2017. The company received the orders on February 18, 2026.

As per the disclosure made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the department has alleged an erroneous refund of accumulated Input Tax Credit (ITC) under Rule 89 of the CGST Rules during the months of September 2022 to December 2022 through four separate orders. The total disputed amount comprises GST of Rs 84,91,80,663 and an equal penalty of Rs 84,91,80,663.

The matter relates to refund claims made by the company’s EOU Unit 3 in respect of zero-rated supply 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 exported goods from the said unit.

Aurobindo Pharma has filed writ petitions against the Order-in-Appeal and has also challenged the validity of Rule 89(4)(C) of the CGST Rules before the Telangana High Court. The petitions are currently pending for disposal.

The company further referred to a judgment of the Karnataka High Court in the case of M/s Tonbo Imaging India Pvt Ltd (Writ Petition No. 13185 of 2020, decided on February 16, 2023), wherein the condition of comparing the domestic value of like goods with exported goods was quashed as being ultra vires the provisions of the CGST Act, 2017.

To safeguard revenue, the department issued protective demand show cause notices for the period September 2022 to December 2022. The company has maintained that it does not have domestic supplies of goods exported from EOU Unit 3 and that there are only scrap sales. It further stated that even if the value of goods available in the domestic market is considered—without admitting that they are similar to or like goods exported—the eligible ITC refund would not significantly impact the refund already sanctioned.

However, the department has confirmed the demand along with interest and imposed an equal penalty. The company has stated that it will file an appeal before the Commissioner of Central Tax (Appeals), Hyderabad.

Aurobindo Pharma clarified that there is no material impact on its financials or operations due to the said orders.