Cipla Ltd Hit with ₹29.77 Crore GST Penalty for Inadmissible ITC and Payment Delays

Cipla Limited, one of India’s leading pharmaceutical companies, has been served a demand order by the GST Authority imposing a penalty of Rs. 29.77 crore. The penalty includes Rs. 9.10 crore for inadmissible Input Tax Credit ( ITC ) availed on customs duty paid challans ( TR6 ) and Rs. 67 lakh for delayed payment timelines under GST provisions.

According to The Economic Times, the demand order was issued by the Joint Commissioner of Central Tax, Office of the Principal Commissioner of Central Tax, GST East Commissionerate, Bengaluru, and disclosed in Cipla’s regulatory filing. The order cited violations under the Central Goods and Services Tax Act, 2017, the Integrated Goods and Services Tax Act, 2017, and the Karnataka Goods and Services Tax Act, 2017.

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In its response, Cipla described the penalty as "arbitrary and unjustified" and announced its intent to appeal the order before the appropriate authority. “Based on an assessment of facts and prevailing law, the Company is of the view that the penalty levied is arbitrary, unjustified, and unsustainable in law. The necessary appeal will be filed in this regard,” Cipla said in an official statement.

The company also assured stakeholders that the penalty would not materially affect its financials or operations. “There is no material impact on the Company’s financials or operations due to the said order.”

So, now, Cipla will prepare its appeal, which will be reviewed by an appellate authority. If successful, the company could overturn the penalty or reduce its impact. However, if the appeal is not in Cipla’s favor, the company might have to pay the full penalty.

About Cipla Limited

Cipla Limited is a global pharmaceutical leader known for its diverse range of products and services. The company serves both consumers and other manufacturers by providing high-quality active pharmaceutical ingredients (APIs), pharmaceutical formulations, and personal care products.

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