Hyderabad: Hyderabad-based Gland Pharma Limited is facing a tax and penalty demand exceeding ₹7 crore after the customs department confirmed an Integrated Goods and Services Tax (IGST) liability of ₹3.53 crore over the alleged wrongful availing of import duty benefits during 2020-21 and 2021-22.The company, however, maintains that the demand is untenable and has decided to challenge the order before the appellate authority.In a disclosure to the BSE and National Stock Exchange on July 16, the company said it had received an order-in-original from the principal commissioner of customs, Hyderabad.The order confirmed an IGST demand of ₹3.53 crore, along with applicable interest, which has not yet been quantified. Customs authorities also imposed an equivalent penalty of ₹3.53 crore under the Customs Act, 1962, taking the total disputed exposure to more than ₹7 crore, excluding interest.The case relates to imports made through the Shamshabad airport air cargo complex. The proceedings concern the company’s claim of IGST benefits under a customs notification covering materials imported for export-related operations.Customs sources said Gland Pharma relied on two Directorate General of Foreign Trade (DGFT) notifications while importing the material and claiming the IGST exemption. Officials contended that the company was entitled to claim benefits only under the applicable primary notification and was therefore liable to pay the tax.According to sources, customs also sought clarification from the DGFT, which did not accept the exemption claimed by the company.Gland Pharma argued that the imported material was subsequently exported and therefore did not attract the tax liability. In its regulatory filing, the company said the demand and penalty were not justified and that it would file an appeal before the appropriate appellate authority.The company further stated that the order was not expected to have any material impact on its financial position, operations or other business activities.
