Drug maker Glenmark Pharmaceuticals Ltd has received a demand notice of Rs 121.25 crore, seeking tax, interest, and penalties from the Joint Commissioner of Central Goods and Services Tax and Central Excise (CGST & CX) in Palghar, Maharashtra. The demand pertains to the period from 2017-18 to 2021-22.
The notice includes a demand of Rs 57.70 crore for excess Integrated Goods and Services Tax (IGST) refunds claimed on the cost, insurance, and freight (CIF) value instead of the free-on-board (FOB) value.
The GST authorities have also appropriated Rs 5.86 crore already paid by the company for surrendering IGST refunds related to non-realization of export proceeds. Additionally, a penalty of Rs 63.56 crore, equivalent to the tax demand, has been imposed.
Glenmark stated that it intends to appeal against the order and emphasized that there is no material impact on its financials or operations.
"The company intends to file an appeal before the appropriate Appellate Authority. There is no material impact on the company’s financials or operations due to the said order," it added.
In May, the Directorate General of GST Intelligence (DGGI) issued show cause notices to 29 pharma companies in Mumbai for alleged GST evasion. The allegations include brand transfer sales availing bogus ITC on expired drugs, claiming fake GST ITC for business support services, and non-payment of tax under the Reverse Charge Mechanism.
Glenmark Pharmaceuticals paid the highest GST dues, spread across two cases, amounting to approximately Rs 130 crore and Rs 40 crore.
