Dr Reddy’s Laboratories has received a tax demand order, including a penalty of ₹6.5 million rupees, from GST authorities. The company intends to appeal the decision, stating the penalty will not materially affect its financials, day-to-day operations, or business continuity.
Dr Reddy’s Laboratories confirmed receipt of a tax demand notice from GST authorities, which includes a penalty of ₹6,5,00,000 for allegedly availing incorrect input tax credits. The order relates to provisions under the CGST/SGST/IGST Act, 2017, and follows an extensive regulatory review of transaction records.
The company emphasized in regulatory communications that it strongly contests the allegations and is preparing to file an appeal with the appropriate appellate authority. Dr Reddy’s stated that, based on its internal assessment, there is no material impact on financials, operations, or other key activities, and the penalty does not threaten overall business health.
Past tax disputes faced by Dr Reddy’s—including those related to mergers and income tax demands—have also resulted in the company reiterating its compliance stance and assurance that all legal steps are followed. The pharma major’s solid financial profile enables it to absorb such regulatory headwinds without business risk.
Key Highlights
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Dr Reddy’s Laboratories receives GST penalty order of ₹6.5 million rupees
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Penalty relates to input tax credit provisions of CGST/SGST/IGST Act, 2017
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Company will appeal; asserts no material impact on finances or operations
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Past regulatory actions have not impaired ongoing business activities
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Reinforces company’s compliance and legal review process
Source: Economic Times, IrisGST, company filings.