Aurobindo Pharma has received an order from the Principal Commissioner of Customs and Central Tax (Appeals I), Hyderabad, confirming a substantial GST demand and associated penalty. The total initial demand, which included interest, was Rs. 77.61 crore, related to availing excess IGST refund and non-reversal of ITC. While the Appellate Authority dropped the interest demand on the reversed ITC, it upheld the core demand and penalty. The company plans to appeal this decision to the Goods and Services Tax Appellate Tribunal (GSTAT).
Confirmation of Tax Authority Order
On March 12, 2026, Aurobindo Pharma was informed of an order passed by the Principal Commissioner of Customs and Central Tax (Appeals I), Hyderabad. This order upheld the previous findings regarding tax discrepancies identified by the Additional Commissioner of Central Tax, Ranga Reddy GST Commissionerate.
Details of Alleged Violations
The core issues cited by the authorities included:
- Availing excess IGST refund based on the CIF value instead of the FOB value.
- Failure to surrender IGST refund following the short realization of export proceeds for exports conducted between July 1, 2017, and March 23, 2020.
- Failure to reverse Input Tax Credit (ITC) as required under Rule 37 of the CGST Rules.
Financial Implication of Demand and Settlement
The original GST demand, along with interest and penalty, amounted to Rs. 77,61,35,242/-. Prior to this appeal outcome, the company had already paid Rs. 23,71,71,782/- of the demand under protest. Furthermore, the company had reversed ITC amounting to Rs. 8,78,23,385/-, which the authorities accepted.
Appellate Authority Ruling and Next Steps
The Appellate Authority’s Order in Appeal (OIA) dated February 27, 2026, provided partial relief by dropping the demand for interest related to the ITC reversal under Rule 37. However, the order upheld the original demand and penalty confirmed by the order dated January 28, 2025.
The company states that there is no material impact on its financials or operations resulting from this order. The company intends to file an appeal against the OIA dated February 27, 2026, before the Goods and Services Tax Appellate Tribunal (GSTAT) within the stipulated timeframe.
Source: BSE
