Update on Aurobindo Pharma GST Demand Notice

Executive Summary On February 19, 2026, Aurobindo Pharma formally disclosed the receipt of a Goods and Services Tax (GST) demand order totaling ₹169.83 crore from the Ranga Reddy GST Commissionerate in Hyderabad. Management has assured investors that this development will have no material impact on the company’s overall financial health or ongoing operations. Financial Breakdown & Origin of Dispute Total Disputed Amount: ₹169.83 crore Key Components: A primary GST demand of ₹84.91 crore, coupled with an equivalent penalty of ₹84.91 crore, plus applicable interest. Context: The dispute centers on accumulated Input Tax Credit (ITC) refunds claimed by Aurobindo’s EOU Unit 3 for the period of September to December 2022. These refunds were for zero-rated goods exported without tax payment under a Letter of Undertaking (LUT). Department's Stance: While the GST Department initially sanctioned these refunds, it later challenged its own decision. The authorities contend that the eligible refund computation failed to factor in the domestic value of similar goods available in the local market. Legal Strategy & Mitigation Aurobindo Pharma is proactively contesting the demand and defending its initial refund claims: Pending Litigation: The company has already filed writ petitions before the Telangana High Court to challenge a 2023 appellate order that initially favored the GST Department. Legal Precedent: To bolster its case, management is citing a favorable Karnataka High Court ruling (Tonbo Imaging India Pvt Ltd), which successfully struck down similar regulatory conditions related to refund calculations. Immediate Action: The company will file a formal appeal against this newly confirmed tax demand before the Commissioner of Central Tax (Appeals), Hyderabad.