Cipla slapped over Rs 1 crore fine by GST Authority
Cipla has expressed its disagreement with the penalty, stating that it believes the order is arbitrary and unjustified.
New Delhi: Pharma major Cipla Ltd on Friday said a fine of over Rs 1 crore has been imposed on the company by GST authority for alleged inadmissible credit claim.
Cipla informed the stock exchanges of a recent order issued by the Joint Commissioner, CGST & C. Excise, Patna-1, imposing a penalty of INR 1,11,94,324 under the Central Goods and Services Tax (GST) Act, 2017.
The order, dated 18th December 2024, was received on 19th December 2024 and pertains to an alleged violation involving the company’s availing of inadmissible TRAN-1 credit.
"The order has been passed by GST Authority on the contention that the company has availed inadmissible TRAN-1 credit. The GST Authority has ordered for recovery of the same along with applicable interest and penalty,” Cipla said.
In a regulatory filing under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Cipla disclosed the penalty and provided details regarding the action taken by the GST Authority. The penalty is related to the company’s use of certain tax credits, which the authority claims were not in accordance with the applicable GST provisions.
Cipla has expressed its disagreement with the penalty, stating that it believes the order is arbitrary and unjustified. The company intends to file an appeal with the relevant appellate authority, seeking a review of the decision.
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The company reassured investors and stakeholders that the penalty and the order will not have a material impact on its financials or operations. Cipla remains confident in its legal position and will continue to take the necessary steps to resolve the matter.
Cipla said based on assessment of facts and prevailing law, it is "of the view that the penalty levied is arbitrary and unjustified".
"The company will file necessary appeals with the appellate authority in this regard. There is no material impact on the company's financials or operations due to the said order," it added.
The company’s disclosure also referenced the SEBI Circular (SEBI/HO/CFD/CFDPoD-1/P/CIR/2023/123) issued on 13th July 2023, under which such notices must be disclosed to the stock exchanges.
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