Innova Captab Limited , a prominent player in the pharmaceutical sector, has announced a significant milestone for its manufacturing facility in Jammu. The State Service of Ukraine on Medicines and Drugs Control (SMDC) has successfully completed a Good Manufacturing Practice (GMP) inspection at the facility, with the working group recommending the issuance of a GMP compliance certificate.

Key Highlights

• Facility Location: Khasra No. 11, SIDCO Industrial Complex, Phase-II Ghatti, Kathua, Jammu & Kashmir, India
• Inspecting Authority: The State Service of Ukraine on Medicines and Drugs Control (SMDC)
• Certification: GMP compliance certificate recommendation
• Significance: SMDC is a participating authority under the Pharmaceutical Inspection Co-operation Scheme (PIC/S)

Implications for Innova Captab

The recommendation for GMP compliance certification carries substantial weight for Innova Captab's global operations. Here's why this development is crucial:

1. Enhanced Global Credibility: The PIC/S certification positions the Jammu facility as an internationally compliant manufacturing site.
2. Market Access: It may facilitate Innova Captab's access to regulated markets, potentially opening up new business opportunities.
3. Quality Assurance: The certification serves as a testament to the high manufacturing standards maintained at the Jammu facility.

Regulatory Compliance

Innova Captab has made this disclosure in accordance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. This transparency ensures that shareholders and potential investors are kept informed about significant developments that could impact the company's operations and market position.

Company Overview

The GMP compliance certificate recommendation from a PIC/S participating authority marks a significant step for Innova Captab in strengthening its position in the global pharmaceutical market. As the company awaits the final issuance of the certificate, stakeholders will be keenly watching how this development translates into tangible benefits for Innova Captab's international operations and market presence.

Innova Captab Limited , a pharmaceutical company, has received a Show Cause cum Demand Notice from the Central Goods & Services Tax (CGST) Commissionerate, Shimla, regarding alleged excess refund claims of accumulated Input Tax Credit (ITC). The notice, issued under Section 74 of the CGST Act, 2017, covers the period from May 2020 to March 2024.

Key Details of the Notice

Alleged Violation

The tax authority claims that Innova Captab applied for refunds under Rule 89(4) of CGST Rules instead of Rule 89(4B), which they assert is a violation of Section 54 of the CGST Act. The company is accused of claiming excess refunds of accumulated Input Tax Credit on account of zero-rated supplies.

Company's Stance

Innova Captab has stated that it believes the notice has no merit. The company plans to submit its defense within the prescribed 30-day timeline. In its disclosure to the stock exchanges, Innova Captab mentioned that it would file its response to the show cause notice with supporting documents.

Potential Implications

The notice demands that Innova Captab show cause as to why:

1. The excess refund of ₹15,81,37,255.40 should not be recovered.
2. Appropriate interest should not be charged under Section 50 of the CGST Act, 2017.
3. A penalty of ₹15,81,37,255.40 should not be imposed under Section 74(1) of the CGST Act, 2017.

This development could have significant financial implications for Innova Captab if the demand is upheld. However, the final outcome will depend on the company's response and the subsequent decision by the tax authorities.

Investors and stakeholders of Innova Captab should monitor this situation closely, as it may impact the company's financial position and compliance status. The resolution of this matter could provide insights into the interpretation and application of GST rules regarding Input Tax Credit refunds for zero-rated supplies in the pharmaceutical sector.