The GST intelligence department has issued a show cause notice to Patanjali Foods, requesting clarification as to why it should not be held accountable for the recovery of input tax credit totaling Rs 27.46 crore.
According to a regulatory filing by the company on April 26, Patanjali Ayurved Group, led by yoga guru Ramdev and primarily engaged in the edible oil business, has been served the notice by 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.
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Citing Section 74 and other relevant provisions of the Central Goods and Services Act, 2017, as well as the Uttarakhand State Goods and Services Act, 2017, in conjunction with Section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017, the department has raised concerns.
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.