Sai Life Sciences Limited , a prominent player in the pharmaceutical industry, is now facing a third significant tax demand from authorities, adding to its ongoing GST-related disputes. The latest development brings the company's total tax demands to over ₹80 crores across multiple cases.

Latest GST Demand Order

On December 10, 2025, Sai Life Sciences received a new GST demand order dated December 9, 2025, from the Deputy Commissioner of Commercial Taxes (Audit), Bidar. This latest order was passed under Section 73(9) of the Goods and Services Tax Act, 2017.

The demand pertains to alleged excess availment of Input Tax Credit in GSTR-3B compared to what was available in GSTR-2A for the financial year 2021-22.

Previous Karnataka Tax Authority Demand

Earlier, the Joint Commissioner of Commercial Taxes in Karnataka had issued an order demanding ₹36.68 crores from the company for alleged non-payment of taxes on intermediary services received from its US subsidiary.

This demand covered the period from July 2017 to March 2022, relating to services received from Sai Life Sciences Inc., USA, under the reverse charge mechanism.

Second GST Demand

In addition to these two major demands, Sai Life Sciences had previously received another GST demand order totaling ₹10.67 crores, including interest and penalties, for alleged excess Input Tax Credit availment and discrepancies in B2B supply records for fiscal year 2020-21.

Company's Response Strategy

Sai Life Sciences has consistently maintained its stance of appealing all GST demand orders. Regarding the latest demand, the company has stated that based on its assessment, an appeal will be filed. The company remains hopeful of a favorable outcome at the appellate level and does not reasonably expect the order to have any material financial impact.

This approach mirrors the company's response to previous demands, suggesting confidence in its tax compliance and documentation.

Cumulative Impact and Implications

With three separate GST demands now totaling over ₹80 crores, Sai Life Sciences faces significant regulatory scrutiny. However, the company's consistent position across all cases indicates a systematic approach to defending its tax positions.

For investors and stakeholders, these developments highlight the complex nature of GST compliance, particularly regarding Input Tax Credit claims and international transactions. The outcomes of these appeals could set important precedents for the pharmaceutical sector and companies with similar operational structures.

Sai Life Sciences Limited, a prominent player in the pharmaceutical industry, has recently received a tax demand order from the Assistant Commissioner, Central Tax, Division-II (Pimpri), Pune-I Commissionerate. The order, issued under Section 74 of the CGST Act, 2017, calls for the payment of Integrated Goods and Services Tax (IGST) amounting to ₹70.16 lakh, along with applicable interest and an equivalent penalty.

Details of the Tax Demand

The tax authorities have raised concerns over two primary issues:

1. Alleged excess availment of Input Tax Credit (ITC)
2. Discrepancies between B2B supply and the Sale/Purchase register updated on the Government Portal

These issues pertain to the financial years 2018-19 to 2021-22, highlighting the importance of maintaining accurate financial records and compliance with tax regulations.

Company's Response

Sai Life Sciences has stated its intention to file an application for rectification of the order. The company appears confident in its position, expressing that it "does not reasonably expect the order to have any material financial impact on the company." This stance suggests that Sai Life Sciences may have grounds to challenge the tax demand or provide clarifications that could potentially reduce or eliminate the liability.

Financial Implications

While the total demand, including tax and penalty, amounts to ₹1.40 crore, it's important to note that this figure represents less than 0.1% of the company's annual revenue, based on publicly available financial data. The relatively small size of the demand in comparison to the company's overall financial position may explain their optimistic outlook regarding the potential impact.

Upcoming Investor Meetings

In a separate announcement, Sai Life Sciences has rescheduled its participation in the Morgan Stanley Twenty Fourth Annual Asia Pacific Summit. The company will now attend one-on-one meetings in Singapore on November 19 and 20, 2025. This engagement with investors suggests that the company maintains an open line of communication with its stakeholders, even in the face of regulatory challenges.

The company has emphasized that no new presentations will be made during these meetings, and they do not intend to discuss any unpublished price-sensitive information.