Regulatory Tax Order
Natco Pharma Receives GST Demand Order of ₹21.35 Lakh; Says No Material Business Impact
NSE
NATCOPHARM
BSE
524816
Natco Pharma Limited has received a GST demand order from the Assistant Commissioner (ST)(FAC), Tenali Circle, Andhra Pradesh, relating to an audit covering the period from April 1, 2020 to December 17, 2024. The order includes a tax demand of ₹21.35 lakh, along with interest and an equivalent penalty. The company stated that it is evaluating the matter and does not expect any material impact on its financial, operational, or business activities.
PRICE-SENSITIVE TRIGGER
Event: Receipt of GST demand order under the APGST and CGST Acts.
Type: Regulatory Tax Order
Impact: Positive
Immediate Effect: Natco Pharma has received a tax demand order and is assessing appropriate legal remedies. The company has stated that the order will not have any material impact on its operations or financial position.
Financials:
Key Metrics:
- Tax Demand: ₹21,34,729
- Interest: ₹17,17,806
- Penalty: ₹21,34,729
- Audit Period: April 1, 2020 – December 17, 2024
- Order Date: July 13, 2026
- Order Received: July 13, 2026
Highlight:
- GST authorities raised a total tax demand of ₹21.35 lakh, along with interest of ₹17.18 lakh and an equivalent penalty.
What Happened ?
Natco Pharma informed the stock exchanges that it has received an order from the Assistant Commissioner (ST)(FAC), Tenali Circle, Andhra Pradesh, following an audit conducted under the APGST and CGST Acts, 2017.
The order raises a tax demand, interest, and penalty relating to alleged under-reporting under the Reverse Charge Mechanism (RCM) in GSTR-3B filings. The company stated that it is currently evaluating the order and will take appropriate legal action.
key details
Regulatory Order:
- Order issued under the APGST and CGST Acts, 2017.
- Audit covered the period from April 1, 2020 to December 17, 2024.
- Order passed on July 13, 2026 and received by the company on the same day.
- Issued by the Assistant Commissioner (ST)(FAC), Tenali Circle, Andhra Pradesh.
Note: The disclosure has been made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Nature of Allegation:
- The authority has alleged a lower amount reported under the Reverse Charge Mechanism (RCM) in GSTR-3B returns.
- Based on the audit findings, tax demand, interest, and penalty have been levied.
- Natco Pharma is evaluating the order and considering the appropriate course of action.
Note: The company has not accepted the demand and is reviewing the available legal options.
Business Impact:
- The company has stated that there is no material impact on its:
- Financial position.
- Operational activities.
- Business operations.
Note: Management believes the regulatory action is not expected to materially affect the company’s ongoing business.
Risk Analysis
Summary:
- The matter represents a routine regulatory tax dispute. While financial liabilities have been proposed, the company has stated that the order is not expected to materially impact its operations and is evaluating legal remedies.
Key Risks:
- Outcome depends on the company’s legal response and regulatory proceedings.
- Additional tax litigation could continue until final resolution.
- Any adverse appellate outcome could require payment of the disputed amount along with applicable interest.
Worst Case:
- If the company is unsuccessful in challenging the order, it may be required to pay the tax demand, interest, and penalty as determined by the tax authorities.
Risk Level: Low
Company Commentary
- The GST order relates to an audit under the APGST and CGST Acts, 2017.
- The company is evaluating the matter and will take an appropriate course of action.
- The order does not have any material impact on the company’s financial, operational, or other business activities.
Official Exchange Filing: Natco Pharma Limited
