Patanjali Foods, the renowned firm led by yoga guru Ramdev, finds itself under the radar of the GST intelligence department. The recent issuance of a show cause notice has stirred discussions as it questions the legitimacy of an input tax credit valued at ₹27.46 crore.
According to a regulatory disclosure by the company on April 26, the Directorate General of GST Intelligence, Chandigarh Zonal Unit, served the notice to Patanjali Foods, delving into the intricacies of tax credit utilization. The notice demands a comprehensive explanation from the company, its officers, and authorized signatories regarding the aforementioned tax credit.
The grounds for this notice are firmly rooted in 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, supplemented by Section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017.
Patanjali Foods, in response, asserted its intention to mount a vigorous defense against the allegations. "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," the company stated.
However, the financial implications of this development remain uncertain until the conclusion of the proceedings, as noted by Patanjali Foods. The outcome of these deliberations could potentially impact the company's financial landscape.
This development comes at a pivotal juncture for Patanjali Foods, as it recently expressed interest in acquiring the non-food business of its promoter group, Patanjali Ayurved Ltd. The company's board has begun evaluating a proposal to acquire the non-food business undertaking, a strategic move that could reshape its business portfolio.
Established in 1986, Patanjali Foods Ltd, formerly known as Ruchi Soya Industries Ltd, has emerged as a significant player in the FMCG sector. With a diversified product portfolio encompassing edible oils, food, FMCG, and wind power generation, the company boasts iconic brands such as Patanjali, Ruchi Gold, and Nutrela.
Patanjali Ayurved's acquisition of Ruchi Soya through the insolvency process, followed by the rebranding to Patanjali Foods Ltd, underscores the company's evolution and strategic ambitions in the market. As the saga unfolds, stakeholders keenly await the resolution of the tax credit dispute and its ramifications on Patanjali Foods' trajectory.
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