Alkem Laboratories Limited has received two GST demand orders from statutory authorities totaling ₹1.89 crores, including penalties, for alleged excess availment of Input Tax Credit across different financial years. The pharmaceutical company plans to contest both orders.

GST Demand Orders Overview

The company received orders from two separate tax jurisdictions. The details of both orders are presented below:

Nature of Alleged Violations

Both demand orders primarily allege excess availment of Input Tax Credit (ITC) by the company during the respective financial years. The orders have been issued under the applicable provisions of the Integrated Goods and Services Tax Act, 2017, with interest charges also being levied as per statutory requirements.

The Haryana order represents the more significant demand, accounting for approximately 94% of the total GST amount sought by the authorities. This order pertains to the financial year 2021-22, while the Rajasthan order relates to FY 2018-19.

Company's Response and Legal Action

Alkem Laboratories has stated that it does not agree with either of the demand orders and plans to contest both through appropriate legal channels. The company is in the process of taking necessary action, including filing appeals against the orders with higher tax authorities.

The pharmaceutical company has emphasized that these GST orders will not have any material impact on its financial, operational, or other business activities. This assessment suggests that the company views the demands as contestable and expects favorable outcomes through the appellate process.

Regulatory Compliance

The disclosure was made in compliance with SEBI listing regulations. The information has also been made available on the company's official website at www.alkemlabs.com for stakeholder reference.

Alkem Laboratories has completed a significant investment in its subsidiary Enzene Biosciences Limited, acquiring equity shares for ₹3 billion through a rights issue. This strategic investment increases the pharmaceutical company's stake in the biologics manufacturing subsidiary to 99.61% of Enzene's total equity share capital.

Transaction Details

The rights issue was executed with the total consideration amounting to ₹3 billion. The transaction was structured as a cash consideration deal, representing a substantial increase from the previously reported investment amount of ₹299.99 crores.

About Enzene Biosciences

Enzene Biosciences Limited operates as a subsidiary of Alkem Laboratories in the biosimilars and biologics contract manufacturing industry. The company reported a turnover of ₹363.62 crores for the financial year ended March 31, 2025, demonstrating its established presence in the biologics manufacturing sector.

Investment Rationale

The acquisition is aimed at supporting Enzene Biosciences' operational and expansion requirements. The investment will be utilized to meet the subsidiary's capital expenditure and working capital requirements, enabling the company to strengthen its manufacturing capabilities and operational infrastructure.

Regulatory Compliance

The transaction was disclosed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company confirmed that the acquisition does not fall within the purview of related party transactions and required no governmental or regulatory approvals for completion.

This investment reinforces Alkem Laboratories' commitment to expanding its presence in the biologics and biosimilars manufacturing space through its subsidiary Enzene Biosciences, positioning the company to capitalize on growing opportunities in the biologics contract manufacturing sector.