GST department demands Rs 1.67 Cr from Orchid Pharma
Orchid Pharma received an order from the GST department demanding Rs 1.67 Cr plus interest regarding an erroneously sanctioned refund. The company disputes the demand, citing it relates to the pre-CIRP period and is covered by the Resolution Plan, and plans to appeal. Management stated the order will not have a material impact on operations.
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Orchid Pharma has received an order from the Additional Commissioner of Central Tax, Chennai-Outer Commissionerate, demanding a payment of Rs 1.67 Cr along with interest. The order, passed under Section 11A of the Central Excise Act, 1944, was received on June 09, 2026, and relates to the recovery of an amount that the authority claims was erroneously refunded previously. The company asserts that the demand is unjustified and unsustainable in law and facts, and intends to file an appeal before the competent appellate authority.
The disclosure was made to the National Stock Exchange of India Limited and BSE Limited in compliance with Regulation 30 read with Part A of Schedule III of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Kapil Dayya, Company Secretary & Compliance Officer, signed the intimation on June 11, 2026.
Background of the Demand
The authority has determined that the refund of Rs 1,67,07,937 was sanctioned erroneously by the then Assistant Commissioner of Central Excise, Poonamalle Division. Consequently, the order confirms the demand and recovery of this amount under Section 11AB of the Central Excise Act, 1944. The company disputes this assessment and views the legal remedies as the appropriate course of action.
Impact Assessment
Orchid Pharma has clarified that the subject matter of the order pertains to a period prior to the commencement of the Corporate Insolvency Resolution Process (CIRP). The company was subsequently acquired pursuant to a Resolution Plan sanctioned by the National Company Law Tribunal. Management is of the view that any liabilities from the pre-acquisition period are addressed under the provisions of the approved Resolution Plan and applicable law. Therefore, the company believes the order will not have a material impact on its financials, operations, or other activities.
| Particulars | Details |
|---|---|
| Name of the authority | Additional Commissioner of Central Tax- Office of the Commissioner of GST and Central Excise Chennai-Outer Commissionerate |
| Nature of action | Order confirming demand and recovery of erroneously sanctioned refund amount of Rs 1,67,07,937 along with interest under Section 11AB of the Central Excise Act, 1944 |
| Date of receipt of order | June 09, 2026 |
| Alleged violation | Erroneous refund by the then Assistant Commissioner of Central Excise, Poonamalle Division |
| Impact | No material impact on financials, operations, or other activities |
Historical Stock Returns for Orchid Pharma
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +8.41% | +9.85% | +27.37% | +8.03% | +27.74% | -31.78% |
How will the appellate authority interpret the interplay between the Central Excise Act liabilities and the protections granted by the NCLT-approved Resolution Plan?
What is the expected timeline for the legal proceedings, and could a prolonged dispute create any contingent liabilities affecting investor sentiment?
Does this order indicate a broader regulatory scrutiny into past refunds sanctioned by the Poonamalle Division that could impact other pharmaceutical companies?
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