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April 30, 2024

Patanjali Foods Faces GST Heat: Show Cause Notice Issued for Rs 27 Crore Input Tax Credit

Patanjali Foods, a prominent player in the FMCG sector, is under scrutiny as the GST intelligence department issues a show cause notice demanding an explanation for input tax credit worth Rs 27.46 crore. The notice, received from the Directorate General of GST Intelligence, Chandigarh Zonal Unit, questions why this credit should not be recovered from the company, as per a regulatory filing made by Patanjali Foods on April 26.

The Yoga guru Ramdev-led Patanjali Ayurved Group’s subsidiary, primarily operating in the edible oil business, faces the inquiry under Section 74 and other relevant provisions of the Central Goods and Services Act, 2017, and the Uttarakhand State Goods and Services Act, 2017, along with Section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017.

The company confirmed the receipt of the show cause notice, stating, “A show cause notice is received by the company… requiring the company, its officers and authorised signatories to show cause as to why input tax credit amounting to Rs 27,46,14,343 should not be recovered (along with interest), and why penalty should not be imposed…”

However, Patanjali Foods asserted that it will take all necessary actions to defend its case before the authority. “As of now the authority has only issued a show cause notice and the company will be taking all necessary action to defend its case before the authority,” the company said. It also emphasized that the financial implications cannot be determined until the proceedings are completed.

Last week, amidst these developments, Patanjali Foods announced its consideration of a proposal to acquire the non-food business of its promoter group Patanjali Ayurved Ltd. In a regulatory filing, the company disclosed that its board had discussed the initial proposal from Patanjali Ayurved Ltd regarding the sale of the latter’s non-food business undertaking.

Patanjali Foods, formerly known as Ruchi Soya Industries Ltd, has been a key player in the FMCG sector since its inception in 1986. The company operates across segments including edible oils, food, FMCG, and wind power generation, with brands like Patanjali, Ruchi Gold, Nutrela, among others.

Jhumpa Lahiri

Jhumpa Lahiri

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