Aurobindo Pharma Ltd. has recently been ordered by the Appellate Joint Commissioner in Hyderabad to repay a total of ₹7.05 crore. This amount includes ₹3.74 crore that the company claimed as input tax credit, along with ₹2.93 crore in interest and a penalty of ₹37.51 lakh. This demand is related to the company’s financial activities during the fiscal year 2019–20.
The order of the Deputy Commissioner, Punjagutta GST Division, was contested by the company before by filing a plea with the appellate authority. The appellate authority, in the updated ruling, rejected the appeal of the company and kept the tax demand, citing the discrepancies in the claimed ITC.
The demand as per the order has emerged from the alleged excess ITC claim when compared to GSTR-2A (auto-populated supplier data) and ITC claimed on supplies from vendors who did not submit their GSTR-3B returns. Without matching and verification, the company has claimed the ITC on these transactions, the authorities claimed.
Aurobindo Pharma decided to submit an appeal to the GST Appellate Tribunal (GSTAT). The company’s disputed credit is the portion of a reconciliation mismatch, an issue in the initial years of GST implementation, where the compliance of the supplier affects the ability of the buyer to claim the credit.
The company cited that the order does not materially impact its financials or current operations, and it continues to adhere to all regulatory needs.
Overview of Aurobindo Pharma
Aurobindo Pharma Limited, headquartered in Hyderabad, Telangana, is one of India’s leading pharmaceutical manufacturers. Established in 1986, the company has built a strong global presence across more than 150 countries, excelling in both formulation development and the production of active pharmaceutical ingredients (APIs).
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Aurobindo Pharma oversees a broad portfolio comprising over 300 formulations and more than 150 active pharmaceutical ingredients (APIs). Its operations are backed by state-of-the-art manufacturing facilities that are approved by leading global regulatory bodies, including the US FDA, UK MHRA, and WHO-GMP.
