Alkem Laboratories , a prominent pharmaceutical company, has received an appeal order from the Commissioner of Customs & Central Tax Appeals-II Commissionerate in Hyderabad, confirming a Goods and Services Tax (GST) demand of Rs 3.37 crore. The order, which covers the period from 2020-2021 to 2021-2022, also includes an additional penalty of Rs 33.93 lakh.

Details of the GST Demand

The appeal order, received by Alkem Laboratories on September 30, 2025, alleges excess availment of Input Tax Credit under the Integrated GST (IGST), Central GST (CGST), and State GST (SGST) Acts. The total demand breaks down as follows:

Company's Response

Alkem Laboratories has stated that it disagrees with the demand order and intends to contest it through appropriate legal actions. The company plans to file an appeal against the order, asserting that it has adequate factual and legal grounds to defend its position.

Impact on Operations

In its disclosure to the stock exchanges, Alkem Laboratories emphasized that this order does not have any material impact on its financial, operational, or other activities. The company believes that the dispute raised in the appeal order is not tenable under the law.

Regulatory Compliance

As per the regulatory requirements, Alkem Laboratories has made the necessary disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has informed both the BSE Limited and the National Stock Exchange of India Limited about this development.

Conclusion

While the GST demand of Rs 3.37 crore plus penalties is significant, Alkem Laboratories appears confident in its stance and is prepared to challenge the order through legal channels. Investors and stakeholders will likely be watching closely as this tax dispute unfolds, although the company maintains that it will not materially affect its operations or financial position.

Alkem Laboratories Ltd. , a prominent Indian pharmaceutical company, has announced significant business restructuring and reported robust financial results for the first quarter, while also facing regulatory challenges.

Business Transfer Agreement

Alkem Laboratories has entered into a business transfer agreement with its wholly-owned subsidiary, Alkem Wellness Limited. According to the company's disclosure under SEBI LODR Regulations, the transfer of the trade generics business will be effective from October 1, 2025. This move, initially announced in December 2024, involves transferring the business as a going concern on a slump sale basis.

Strong Q1 FY2026 Performance

For the April-June quarter of FY2026, Alkem Laboratories demonstrated impressive financial results:

The company's performance was driven by a 2.9% overall volume growth, showcasing its resilience in the pharmaceutical market.

GST Order and Company's Response

Alkem Laboratories faces a regulatory challenge as it received a GST order confirming a demand of ₹35.11 crore, along with a penalty of ₹3.50 crore. The order covers the period from July 2017-18 to March 2022 and primarily alleges denial of input tax credit due to double claims. However, the company has expressed disagreement with the order and intends to contest it, demonstrating its commitment to resolving regulatory issues.

Market Response

Despite the strong quarterly results, Alkem Laboratories' shares ended lower by 1.72% at ₹5,413.50, possibly reflecting investor concerns over the GST order.

The company's strategic move to transfer its trade generics business to a wholly-owned subsidiary, coupled with its strong financial performance, indicates Alkem's efforts to optimize its business structure and maintain growth momentum. However, the ongoing GST dispute adds a layer of complexity to the company's regulatory landscape, which investors will likely monitor closely in the coming months.