Hyderabad-based pharmaceutical giant, Divi's Laboratories, disclosed on November 16 that it has received a Goods and Service Tax (GST) demand notice amounting to Rs 82 crore. The notice, issued by the GST Commissionerate in Hyderabad, includes an Integrated Goods and Service Tax (IGST) demand of Rs 82,04,24,880, accompanied by applicable interest and penalties.
In response to the notice, Divi's Labs has carefully examined the merits of the case and has opted to file an appeal with the Appellate Authority within the stipulated time frame under the GST Law. The company expressed optimism regarding a favorable outcome and emphasized that it does not anticipate any significant financial impact from the order.
The demand order specifically relates to the recovery of the refund of IGST granted under Rule 96 of the CGST Rules, 2017. Divi's Labs is alleged to have erroneously claimed the refund in violation of the provisions of the GST Act, 2017 ('GST Law').
Despite this development, at 11:47 am, the company's stock was trading flat at Rs 3,546.80 on the NSE, reflecting a marginal 0.28 percent increase from the previous close. Earlier in the financial year, Divi's Laboratories reported a significant 29.50 percent year-on-year decline in its consolidated net profit for the July-September quarter, amounting to Rs 348 crore, falling short of market estimates. In the corresponding period last year, the company had recorded a profit of Rs 493.60 crore. Divi's Labs remains steadfast in addressing the GST demand notice and remains optimistic about the future outlook of the case.