GST probe wing set to widen scrutiny of pharma companies
The Directorate General of GST Intelligence (DGGI) is set to intensify the scrutiny of suspected tax evasion by pharmaceutical companies, over non-payment of dues. In addition to the notices sent already, the DGGI is likely to ask many more companies to explain what it perceives as under-payment of tax by them in the current year, FE has learnt. The notices could pertain to non-payment of GST on brand transfer sales, claiming fake input tax credit (ITC) on expired drugs and for business support services, and non-payment under the reverse charge mechanism, according to official sources.
The combined tax liability that would be mentioned in all these notices is close to Rs 1,000 crore, and so far Rs 450-500 crore has been paid by the pharmaceutical companies. “The payment so far made has been for notices issued in FY23 and FY24; but many companies have not yet paid. We shall be issuing more such notices this year too,” an official said.
