Zydus Lifesciences faces ₹33.50m tax demand over sales commission

Zydus Lifesciences Limited (ZLL) announced that the Office of the Commissioner, Central Goods and Services Tax and Central Excise, issued an order confirming a demand of ₹33.50 million with interest and penalty. This pertains to the alleged availment and utilization of CENVAT credit on sales commission paid to foreign entities for Business Auxiliary Services between March 2008 and June 2017.

Previously, ZLL received show cause notices totaling ₹392.47 million for alleged CENVAT credit availment on input services for the period spanning March 2008 to June 2017. Following detailed submissions, tax authorities dropped demand for ₹358.97 million, leaving the current confirmed demand of ₹33.50 million.

Zydus Lifesciences Limited intends to challenge this order by filing an appeal. The company stated that there would be no material financial impact on its operations.