Patanjali Group companies face GST heat, receives show-cause notices
Apr 29, 2024
Synopsis
Patanjali Foods has received a show cause notice from the Directorate General of GST Intelligence, Chandigarh, for allegedly claiming Rs. 27.5 crore in undue input tax credit. The company has vowed to defend its position and comply with the law, stating that the financial implications are yet to be determined.
Patanjali Foods, a leading FMCG player in India, is under scrutiny as it has been served a show-cause notice by the Directorate General of GST Intelligence (DGGI) in Chandigarh for an alleged undue claim of Rs. 27.5 crore in input tax credit (ITC). This notice, issued under the CGST Act, highlights a potential discrepancy in the company's tax filings that could result in penalties.
In response to the notice, a spokesperson for Patanjali Foods stated, "The Company has received a Show Cause Notice from the Directorate General of GST Intelligence, Chandigarh Zonal Unit. The Company, its Officers, and authorized signatories were asked to explain why input tax credit amounting to Rs 27,46,14,343 should not be recovered (with interest), and why penalties should not be imposed under Section 74 and other applicable provisions of the CGST Act 2017/Uttarakhand SGST Act, 2017, in conjunction with section 20 of IGST Act 2017."
The company has asserted its intention to vigorously defend its position before the authorities. However, it has also clarified that the financial implications of the notice cannot be determined until the proceedings are concluded.
This development comes amidst heightened scrutiny on tax compliance in the FMCG sector. Notably, this is not the first time Patanjali has faced such scrutiny. In a related development, the DGGI has sent show-cause notices to two other Patanjali Group companies for alleged wrongful ITC claims. Additionally, a case involving alleged SGST nonpayment and wrongful ITC claim has been referred to Uttarakhand for further investigation.
Patanjali Foods has reiterated its commitment to adhering to the highest standards of corporate governance and has assured that it will address this issue in compliance with the law.
[The Economic Times]
