Patanjali Foods has received a show cause notice from the GST intelligence department, asking the company to explain why input tax credit worth Rs 27.46 crore should be recovered from it. According to a regulatory filing made by the company on April 26, the Yoga guru Ramdev-led Patanjali Ayurved Group firm, which is mainly into the edible oil business, has received the notice from the Directorate General of GST Intelligence, Chandigarh Zonal Unit.
"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...," the company said as quoted by news agency PTI.
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The department has invoked 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.
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Patanjali Foods stated that it will undertake all necessary actions to defend its case before the authority, emphasising that the financial implications cannot be determined until the proceedings are concluded. "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," Patanjali Foods said."... expected financial implications cannot be determined till the completion of the proceedings," the company added.
Last week, Patanjali Foods said it would evaluate a proposal to acquire the non-food business of promoter group Patanjali Ayurved. The company's board discussed the initial proposal received from Patanjali Ayurved Ltd for the sale of the latter's non-food business undertaking to Patanjali Foods.
Established in 1986, Patanjali Foods Ltd, formerly known as Ruchi Soya Industries Ltd, is a prominent player in the FMCG sector. It operates in segments such as edible oils, food and FMCG, and wind power generation, boasting brands like Patanjali, Ruchi Gold, and Nutrela, among others. Patanjali Ayurved acquired Ruchi Soya through the insolvency process and subsequently renamed the company Patanjali Foods Ltd.
(With Agency Inputs)