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RDY Negative Sentiment Score: 40/100

Dr. Reddy's Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, India. CIN : L85195TG1984PLC004507 Tel : +91 40 4900 2900 Fax : +91 40 4900 2999 Email : mail@drreddys.com www.drreddys.co

Wednesday, March 13, 2024 1 min read
Key Takeaway: Dr. Reddy's Laboratories' subsidiary Aurigene Oncology has received a tax demand order from the GST Authority resulting in a penalty. The order, issued by the Deputy Commissioner of Commercial Taxes, claims Aurigene is liable for GST on services provided to foreign customers. Despite the penalty amounting to Rs.3,06,31,006, the company assessed that there will be no significant impact on its financials or operations. Aurigene plans to contest the order through an appeal.

Market Sentiment Analysis

POSITIVE FACTORS

  • Aurigene plans to file an appeal with the appellate authority.
  • There may not be a material impact on financials or operations.

CONCERNS & RISKS

  • A tax demand order has been issued against Aurigene, leading to penalties.
  • The company faces a financial penalty of Rs.3,06,31,006 for GST non-compliance.

Full Press Release Details

National Stock Exchange of India Ltd. (Scrip Code:
BSE Limited (Scrip Code: 500124)
New York Stock Exchange Inc. (Stock Code: RDY)
NSE IFSC Ltd. (Stock Code: DRREDDY)
is to inform that the wholly-owned subsidiary of the Company, namely, Aurigene Oncology Limited (formerly, Aurigene Discovery Technologies
Limited) [hereinafter referred to as "Aurigene"], has received an order from GST Authority towards tax demand including interest
and penalty. The details as required under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
Name of the authority : Deputy Commissioner of Commercial Taxes, Bangalore, Karnataka.
Nature and details of the action(s) taken, initiated or order(s) passed : Aurigene, a wholly-owned subsidiary of the Company has received order seeking demand including interest and penalty under KGST/ CGST/ IGST Act, 2017.
Date of receipt of direction or order, including any ad-interim or interim orders, or any other communication from the authority : Order dated 11.03.2024 was received by the Company on 12.03.2024.
Details of the violation(s)/ contravention(s) committed or alleged to be committed : The authority has passed the order on the contention that the place of supply is in India for the services provided by Aurigene to its foreign customers and hence liable for GST.
Impact on financial, operation or other activities of the listed entity, quantifiable in monetary terms to the extent possible : The above order levies a penalty of Rs.3,06,31,006. Based on our evaluation, there is no material impact on the financials, operations, or other activities of the Company.
Aurigene will file necessary appeal with the
appellate authority in this regard.
This is for your information and records.
For Dr. Reddy's Laboratories Limited
Company Secretary, Compliance Officer & Head-CSR

Frequently Asked Questions

What order did Aurigene receive from the GST Authority?

Aurigene received a tax demand order including interest and penalty.

Which authority issued the order to Aurigene?

The order was issued by the Deputy Commissioner of Commercial Taxes, Bangalore.

When was the order received by Aurigene?

The order was received on 12.03.2024.

What is the penalty amount levied on Aurigene?

The penalty imposed on Aurigene amounts to Rs.3,06,31,006.

Will Aurigene appeal the GST Authority's order?

Yes, Aurigene will file an appeal with the appellate authority.

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Last updated: Mar 13, 2024