Godfrey Phillips India Faces ₹166 Crore GST Demand from CGST Authorities

Godfrey Phillips India Ltd., the manufacturer of popular cigarette brands like Marlboro and Four Square, has been issued a tax demand of Rs. 166 crore by the Office of the Commissioner of CGST and Central Excise in Belapur, Navi Mumbai. The demand arises from allegations of undervaluation of goods, leading to a shortfall in GST payments.

The breakdown of the demand includes a confirmed GST amount of Rs. 70.34 crore, a GST Compensation Cess of Rs. 12.56 crore, and a penalty of Rs. 82.90 crore under the CGST Act, along with applicable provisions of the Maharashtra GST Act and the GST (Compensation) Act.

In response, Godfrey Phillips has stated that this order does not materially impact its financials, operations, or other activities. The company is currently evaluating all options, including the possibility of filing an appeal against the order.

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Godfrey Phillips India Ltd., established in 1844 and headquartered in Delhi, is a major player in the Indian cigarette industry. The company manufactures and sells various cigarette brands, including Four Square, Red and White, Cavanders, Tipper, and North Pole. Under a license agreement with Philip Morris International, it manufactures and distributes Marlboro cigarettes in India.

In the fiscal year 2022, the company reported a revenue of Rs. 44.252 billion and a net income of Rs. 6.083 billion. Beyond tobacco products, Godfrey Phillips has diversified into tea, pan masala, and confectionery items. This tax demand adds to the list of challenges faced by major players in the Indian tobacco industry, which has been under increased scrutiny from tax authorities in recent years.

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