Patanjali Foods GST Notice: ₹1,353 Cr FY23 Demand

Why Patanjali Foods is back in focus

Shares of Patanjali Foods Ltd are set to be in focus after the company disclosed that it received a show-cause notice (SCN) from the GST department. The notice relates to alleged differences and anomalies in turnover for FY 2022-23. The company said the issue stems from a comparison of its monthly GSTR-3B returns with GSTR-7 returns filed by TDS deductors. Patanjali Foods also noted that its stock has fallen 20% over the past six months, putting additional attention on regulatory developments. In the latest trading reaction cited in the provided information, the stock fell about 2.52% to close at ₹454.

What the tax department has alleged

In its exchange filing, Patanjali Foods said the authority found alleged discrepancies after comparing GSTR-3B returns filed by the company with corresponding GSTR-7 returns filed by deductors of TDS. According to the filing and descriptions provided, the mismatch was presented as a turnover reconciliation issue. The SCN has been issued by the Office of the Assistant Commissioner (ST), Royapuram (C) Assessment Circle, North Division, Chennai. The proposed demand is linked to FY 2022-23 and is tied to GST return reconciliation rather than a new operational event.

The size of the proposed GST demand

Patanjali Foods disclosed that the SCN proposes a total tax demand of ₹1,352.92 crore, along with penalty and applicable interest under GST laws. The company stated that the notice proposes a demand of ₹13,52,92,49,106 (₹1,352.92 crore) and a penalty aggregating to ₹1,35,29,24,910 (₹135.29 crore). The notice also includes interest at 18% on the CGST and SGST components, as described in the provided material. Because proceedings are still underway, the figures represent a proposal in the SCN rather than a concluded liability.

CGST-SGST breakup and penalty details

The proposed tax demand includes an equal split between state and central GST components. As described, the tax authority has demanded ₹676.46 crore each in SGST and CGST. The notice also contains a penalty component, with the filing citing an aggregate penalty of ₹135.29 crore. Separately, the provided information also describes the penalty as ₹135.29 crore each under SGST and CGST, highlighting that breakups have been reported in more than one way. Patanjali Foods has not, in the provided text, quantified any final payable amount because the matter remains subject to adjudication.

Timeline and legal provisions cited in the notice

The notice is dated May 25, 2026, and was said to have been received on May 25 (Monday), as per the provided details. It was issued under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017. Section 73 proceedings generally deal with tax not paid or short paid without fraud allegations, but the provided information focuses on the reconciliation differences referenced by the authority. Patanjali Foods said it will respond within the prescribed timelines.

Company response: no immediate financial liability expected

Patanjali Foods said it is consulting tax advisors and preparing an appropriate response. The company stated it believes it has adequate grounds to substantiate its position before the relevant authority. Importantly for investors, Patanjali Foods said that, as of now, it does not expect any financial liability arising from the notice. At the same time, it cautioned that the exact financial implications cannot be determined until the proceedings are completed. This language indicates that the company is treating the SCN as a proposed demand that can be contested through submissions and hearings.

What the market is watching

The stock context in the provided information suggests heightened sensitivity to regulatory headlines. Patanjali Foods shares are down 20% over the past six months, and the GST notice news was followed by a reported drop of about 2.52%, with the stock closing at ₹454. For market participants, the key near-term variables are the company’s formal reply, the department’s assessment of the response, and any subsequent order if the proceedings move forward. Any confirmed liability would only be known after completion of the process described by the company.

Recent financial snapshot mentioned in the provided data

Beyond the tax notice, the provided material also references operating performance numbers. It states that Patanjali Foods reported net profit of ₹364.2 crore in the third quarter, down about 26% year-on-year. Revenue was reported at ₹10,483 crore, up 16.5%. These figures provide context on scale, but they are not directly linked in the provided text to the GST reconciliation issue, which relates to FY 2022-23 returns.

Key facts at a glance

Why turnover reconciliation issues matter

GST notices tied to return mismatches typically require companies to reconcile outward supply, tax paid, and TDS-related reporting across multiple filings. In this case, the authority’s comparison is described as GSTR-3B versus GSTR-7 filed by deductors of TDS. For businesses, such mismatches can arise from timing differences, classification issues, or reporting by counterparties, but the provided information does not specify the underlying reason beyond “differences and anomalies.” The next concrete step will be Patanjali Foods’ formal submission, followed by the department’s evaluation under the legal provisions cited.

Conclusion

Patanjali Foods has disclosed a GST show-cause notice proposing a ₹1,352.92 crore demand for FY 2022-23, plus penalty and 18% interest, linked to alleged turnover discrepancies across GST returns. The company says it is consulting advisors, will respond within timelines, and does not expect an immediate financial liability at this stage. Investors will track the company’s response process and any subsequent updates as the proceedings progress under Section 73 of the relevant GST laws.