Zydus Lifesciences Limited , a prominent player in the pharmaceutical industry, has received a significant tax demand from Indian authorities. The company plans to challenge the order, maintaining its stance on the issue.

Demand Order Details

The Joint Commissioner of Common Adjudication Authority CGST, Ahmedabad, Gujarat, has issued a demand order to Zydus Lifesciences for ₹74.23 crores. This order pertains to an alleged excess refund claim of Integrated Goods and Services Tax (IGST) on the export of goods for the period from April 2018 to March 2024.

The Crux of the Matter

The tax authority claims that Zydus Lifesciences used the CIF (Cost, Insurance & Freight) value instead of the FOB (Free On Board) value for export calculations. This discrepancy forms the basis of the demand order.

Order Specifics

The order encompasses four GST registrations across Gujarat, Maharashtra, Himachal Pradesh, and Goa.

Company's Response

Zydus Lifesciences has stated its intention to challenge the order by filing an appeal. The company believes it has a strong case against the demand. In its disclosure to the stock exchanges, Zydus Lifesciences emphasized that there is no material financial impact on the company as a result of this order.

Implications

While the demand order represents a significant amount, Zydus Lifesciences' confident stance and immediate plan to appeal suggest that the company is prepared to defend its position. The outcome of this case could have implications for how pharmaceutical companies calculate IGST refunds on exports, potentially setting a precedent for the industry.

As the situation develops, stakeholders will be keenly watching how this case unfolds and its potential impact on Zydus Lifesciences' operations and the broader pharmaceutical sector's tax practices related to exports.

Zydus Life Science , a prominent player in the pharmaceutical industry, has achieved a significant milestone with the approval of its Baddi manufacturing plant by the U.S. Food and Drug Administration (USFDA). The approval comes with a Voluntary Action Indicated (VAI) classification, marking a positive development for the company's manufacturing capabilities.

Key Highlights

• USFDA Approval: Zydus Lifesciences' Baddi manufacturing facility has received approval from the USFDA.
• Classification: The facility has been classified as Voluntary Action Indicated (VAI).
• Inspection Period: The USFDA conducted an inspection at the Baddi facility from August 4 to August 13.
• Establishment Inspection Report (EIR): The company has received the EIR from the USFDA, concluding the inspection as closed.

Implications of VAI Classification

The Voluntary Action Indicated (VAI) classification is a significant outcome for Zydus Lifesciences. This classification suggests that while the FDA may have observed some minor issues during the inspection, these are not significant enough to warrant official action. It indicates that the company may need to address certain aspects voluntarily, but overall, the facility meets the necessary standards for pharmaceutical manufacturing.

Company's Disclosure

In compliance with regulatory requirements, Zydus Lifesciences has made this disclosure pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This transparency ensures that stakeholders and investors are kept informed about significant developments that may impact the company's operations and market standing.

Conclusion

The approval of the Baddi manufacturing facility by the USFDA is a positive development for Zydus Lifesciences. It potentially strengthens the company's position in the pharmaceutical market, particularly for products destined for the U.S. market. The VAI classification also reflects the company's commitment to maintaining high manufacturing standards and its ability to meet stringent regulatory requirements.