Patanjali Foods gets ₹1,353 crore GST notice for FY2023

What the latest GST notice is about

Patanjali Foods said it has received a show-cause notice from the GST department seeking more than ₹1,352 crore for FY2022-23, citing alleged discrepancies in reported turnover. The company disclosed the development in a regulatory filing, adding that the notice was issued by the Chennai North Division and received on May 25.

The notice, as described by the company, focuses on differences between turnover reported by Patanjali Foods and turnover reflected in the tax deduction at source filings made by deductors. The disclosure comes at a time when GST authorities have been closely scrutinising mismatches between different GST returns and turnover declarations across companies.

Chennai North Division flags GSTR return mismatch

According to the regulatory filing, the GST authority alleged differences between the company’s GSTR-3B monthly returns and the corresponding GSTR-7 returns filed by deductors of TDS. In GST compliance, such mismatches can lead to queries, reconciliations, and in some cases, demands if the authority believes tax has been short paid.

Patanjali Foods framed the issue as stemming from “alleged differences and anomalies in turnover reported by the Company and deductors of TDS,” which resulted in the show-cause notice being issued.

Demand amount, penalties, and interest asked

The company said the notice demanded ₹1,352.92 crore, with a breakup of ₹676.46 crore under SGST and ₹676.46 crore under CGST. In addition, the filing noted a penalty demand of ₹135.29 crore under SGST and another ₹135.29 crore under CGST.

The authority also sought interest at 18% on the CGST and SGST dues for the FY2022-23 tax period. Patanjali Foods did not quantify the interest amount in its disclosure, stating that the final financial implications cannot be determined until the proceedings are completed.

Patanjali Foods’ response and timeline

Patanjali Foods said it is consulting tax advisors and will file an appropriate response within the prescribed timelines. The company also stated it believes it has adequate grounds to substantiate its position.

Importantly for investors tracking contingent liabilities, Patanjali Foods added that it does not expect any immediate financial liability from the notice at this stage. The company said the exact financial implications would depend on the eventual outcome of the proceedings.

Another GST order: Kutch penalty of ₹3.87 crore

Separate from the Chennai show-cause notice, Patanjali Foods disclosed it received a GST order that imposed a penalty of ₹3.87 crore for tax compliance issues covering 2019-23. The company said the order from the Office of the Commissioner of Central Goods and Service Tax and Central Excise, Kutch (Gandhidham) relates to excess Input Tax Credit (ITC) claims and non-payment under the Reverse Charge Mechanism.

The company said it expects no financial impact beyond the stated penalty and plans to appeal. It disclosed the penalty as ₹3,86,78,700 (₹3.87 crore). The order was dated March 13, 2026, and received on March 16, 2026, through email and via upload on the GST portal.

Chennai penalty disclosure: ₹0.34 crore for ineligible ITC

Patanjali Foods has also disclosed a separate penalty levied by the Office of the Commissioner of GST and Central Excise, Chennai. The issue cited was non-compliance relating to “non reversal of ineligible ITC of Compensation Cess” availed during FY2020-21 to FY2022-23.

The penalty amount disclosed was INR 3,390,542, which is ₹0.34 crore. The company said there is no material impact on financial or operational activities, except to the extent of the penalty amount, and that it would file an appeal before the Appellate Authority under the CGST Act, 2017.

DGGI notice: ITC of about ₹27.46 crore under question

In another disclosed matter, Patanjali Foods has received a show-cause notice from the Directorate General of GST Intelligence (DGGI), Chandigarh Zonal Unit, asking why ITC amounting to ₹27,46,14,343 (₹27.46 crore) should not be recovered along with interest, and why penalties should not be imposed.

The filing referenced provisions including Section 74 of the CGST Act, 2017 and Uttarakhand SGST Act, 2017 read with Section 20 of the IGST Act, 2017. The company said it would take necessary action to defend its case and that financial implications cannot be determined until the proceedings conclude.

GST refund dispute and court proceedings on inverted duty refunds

The provided material also refers to a petition filed by Patanjali Foods against the Union of India related to a GST refund application. The refund was initially granted through a sanction order dated 12.01.2024, and later challenged by the government as an erroneous refund.

A notice under Section 73 was issued on 25.04.2024 seeking recovery of ₹1,70,07,091 (₹1.70 crore) along with applicable interest and penalty. Subsequently, an Order-in-Original dated 10.09.2024 confirmed the demand of ₹1.70 crore toward erroneous refund and interest, along with a further penalty of ₹17,00,709 (₹0.17 crore).

The dispute also turns on whether restrictions imposed through Notification No. 09/2022-Central Tax (Rate) dated 13.07.2022 on refunds of unutilised ITC due to inverted duty structure for specified goods apply prospectively. The material states the restriction would apply to refund applications filed on or after 18.07.2022, and not to those filed before that date.

Key facts and amounts at a glance

Market impact: what investors typically track in such disclosures

From an investor lens, the largest headline number is the FY2022-23 show-cause notice of ₹1,352.92 crore, plus proposed penalties and 18% interest. But the company’s disclosure also makes it clear that the matter is at the notice stage and that it plans to respond within timelines after consulting tax advisors.

The set of disclosures also shows multiple GST-related threads across different units and tax periods, including ITC, reverse charge, and refund disputes. Patanjali Foods has consistently stated, across the items described here, that the financial outcome cannot be determined until proceedings conclude, and that it expects either no immediate liability or impact limited to the quantified penalty in specific orders.

Management commentary on growth targets (as provided)

Separately, the provided transcript excerpts include management commentary pointing to a 15% target for a segment referred to as HPC, and an 8%-10% growth target for the overall foods portfolio. The transcript also refers to an 18% margin target and mentions that a segment could be closer to about ₹3,500 crore in annual revenue, along with a reference to nearly 20% growth.

These statements are not linked in the provided material to the GST proceedings, but they indicate the company’s stated performance targets in the period discussed.

Conclusion

Patanjali Foods’ latest disclosure centres on a Chennai North Division show-cause notice tied to alleged turnover mismatches between GSTR-3B and GSTR-7 for FY2022-23, with tax demand of ₹1,352.92 crore, penalties, and 18% interest sought. Alongside this, the company has also reported other GST actions, including a ₹3.87 crore penalty order from Kutch and a ₹0.34 crore penalty disclosure from Chennai, as well as earlier ITC and refund-related disputes.

Next steps will hinge on Patanjali Foods’ formal replies and any subsequent orders from the relevant authorities, including outcomes of appeals where the company has indicated it plans to challenge demands or penalties.