Zydus Lifesciences Faces ₹33.50 Million Penalty Over CENVAT Credit

Disclaimer This is an AI-assisted live blog with updates sourced from multiple news outlets and agencies Disclaimer

Zydus Lifesciences Limited has been penalized ₹33.50 million following an order related to the alleged availment and utilization of CENVAT (Central Value Added Tax) credit on sales commission paid to foreign entities. The order, issued by the Commissioner of CGST, Ahmedabad, was communicated to the company via email on September 24, 2025.

The issue pertains to the alleged availment and utilization of CENVAT credit on sales commission paid to foreign entities, classified as Business Auxiliary Services under Rule 14 of the CENVAT Credit Rules, 2004, read with section 11A of the Central Excise Act, 1944. The demand for ₹33.50 million, along with applicable interest and a penalty of the same amount, has been confirmed by the authorities.

The initial notices covered the period from March 2008 to June 2017, with an aggregate amount of ₹392.47 million. However, after submissions by the company, the Tax Authorities dropped demands of ₹358.97 million, except for the matter related to CENVAT credit on sales commission paid to foreign entities.

Zydus Lifesciences intends to challenge the order by filing an appeal. The company does not anticipate any material financial impact as a result of this order.

The details of the order are being disclosed under regulation 30 of Listing Regulations read with the SEBI Circulars.