Hyderabad, January 29, 2025—Aurobindo Pharma Limited (NSE: AUROPHARMA, BSE: 524804) has received two tax demand orders from the Deputy Commissioner (ST) STU-1, Punjagutta Division, Hyderabad, regarding the recovery of Compensation Cess refunds for May 2018 and June 2018.
Key Details of the Tax Demand
- Issuing Authority: Deputy Commissioner (ST), STU-1, Punjagutta Division, Hyderabad.
- Total Amount Demanded: ₹2,62,43,703.
- May 2018:
- Tax: ₹68,14,130.
- Interest: ₹56,35,379.
- Penalty: ₹68,14,130.
- Total: ₹1,92,63,639.
- June 2018:
- Tax: ₹24,69,059.
- Interest: ₹20,41,946.
- Penalty: ₹24,69,059.
- Total: ₹69,80,064.
- May 2018:
- Date of Order Receipt: January 28, 2025.
- Nature of Violation: Alleged erroneous refund of Compensation Cess on coal used in manufacturing and export of final products.
Company’s Response
Aurobindo Pharma clarified that the refunds were sanctioned after due verification by the Jurisdictional Deputy Commissioner. However, Show Cause Notices (SCNs) were issued, alleging that refunds were wrongly granted since Compensation Cess is not eligible when the taxpayer makes zero-rated supplies with tax payment.The company intends to appeal before the Appellate Authority within the prescribed timeline.
Impact on Financials
Due to this tax demand, Aurobindo Pharma does not expect any material impact on its financials or operations. The company remains optimistic about a favorable resolution through the appeals process.This development reflects regulatory scrutiny on tax refunds and highlights the importance of compliance in indirect tax matters for large corporations.