Jubilant Pharmova Limited has informed stock exchanges about a GST demand order received by its wholly-owned subsidiary, Jubilant Generics Limited, from tax authorities in Uttarakhand.

GST Demand Details

The Assistant Commissioner Central GST Division, Roorkee issued a Refund cum Rejection Order on December 26, 2023, at 4:33 PM (IST). The order pertains to Jubilant Generics Limited's facility located at Sikandarpur Bhainswal, Bhagwanpur, District Haridwar, Roorkee, Uttarakhand.

Nature of the Issue

The GST authorities have confirmed the demand and recovery of an erroneously sanctioned provisional refund amount. According to the order, this resulted from an alleged incorrect calculation in the refund process. The demand includes both the principal amount and applicable penalty components.

Company's Response and Legal Position

Jubilant Pharmova has outlined its stance on the GST demand order in its regulatory filing:

• The company considers the demand legally incorrect, bad in law, and frivolous
• Management believes the authorities did not properly examine legal provisions, facts, and documents already submitted
• The company maintains it has a very good case on merits
• Plans to file an appeal with documentary evidence before the Commissioner (Appeals)

Financial and Operational Impact

The company has clarified the expected impact of this development:

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Schedule III and the SEBI Master Circular dated November 11, 2023. The company has simultaneously posted the relevant documentation on its website at www.jubilantpharmova.com as per regulatory requirements.

Jubilant Pharmova is currently in the process of taking necessary legal action to challenge the impugned demand order through the appropriate appellate channels.

Jubilant Pharmova Limited , a prominent player in the pharmaceutical sector, has announced that its wholly-owned subsidiary, Jubilant Biosys Limited, has received a significant GST demand order. The order, issued by the Deputy Commissioner of Commercial Taxes in Mysuru, Karnataka, amounts to Rs 13.77 crore for the Financial Year 2021-2022.

Details of the GST Demand

The adjudication order breaks down the total demand as follows:

The dispute primarily revolves around issues related to the availment and reversal of Input Tax Credit (ITC) during the fiscal year 2021-2022. The order alleges excess or irregular availment of Input Tax Credit and denies the benefit of GST reduction on credit notes issued by the company.

Company's Response

Jubilant Pharmova has stated that it plans to file a detailed appeal contesting the GST demand and penalty before the GST Appellate Authority. The company maintains that the Adjudication Order is legally incorrect and has been passed without properly examining the issues at hand. As a result, Jubilant Pharmova believes it has a strong case in its favor.

Financial Impact

Despite the substantial amount involved in the GST demand, Jubilant Pharmova expects no financial or operational impact from this development. This confidence likely stems from the company's belief in the merits of its case.

Conclusion

While the GST demand of Rs 13.77 crore is significant, Jubilant Pharmova's confident stance and plans to appeal suggest that the company is prepared to address this challenge. Investors and stakeholders will likely be watching closely as the appeal process unfolds, but for now, the company maintains that there will be no material impact on its operations or finances.

As the situation develops, it will be crucial to monitor any updates on the appeal process and any potential implications for Jubilant Pharmova's financial statements in the coming quarters.