Zydus Lifesciences Receives ₹148 Crore Demand and Penalty Order from GST Authorities

Zydus Lifesciences Ltd announced on November 1, 2025, that it received a demand order from the Joint Commissioner of Common Adjudication Authority, CGST, Ahmedabad. The company faces a demand of ₹74.23 crore for an alleged excess refund claim of Integrated Goods and Services Tax (IGST) on goods exported. This claim reportedly arose from using the CIF (Cost, Insurance & Freight) value instead of the FOB (Free On Board) value for calculation. Alongside the demand, an equivalent penalty of ₹74.23 crore has been imposed, plus applicable interest. This order covers the period from April 2018 to March 2024 and affects GST registrations in Gujarat, Maharashtra, Himachal Pradesh, and Goa.

Zydus Lifesciences expressed confidence in its position, stating it has a strong case and plans to file an appeal against the order. The company also clarified that this order is not expected to have any material financial impact on its ongoing operations.

Impact This news might cause some short-term investor sentiment concern due to the large demand and penalty amount. However, the company's strong assertion of no material financial impact and its intent to appeal mitigates significant downside risk unless the appeal fails. Impact Rating: 5/10

Difficult Terms IGST (Integrated Goods and Services Tax): A tax levied on inter-state supply of goods and services in India. CIF (Cost, Insurance & Freight): A shipping term where the seller covers the cost of goods, insurance, and freight to the destination port. FOB (Free On Board): A shipping term where the seller's responsibility ends once the goods are loaded onto the ship, and the buyer covers costs and risks thereafter. Adjudication Authority: A body empowered to make a formal judgment or decision on a legal or administrative matter.