Alkem Labs denies report on DGGI income tax investigation against drug maker

The Directorate General of GST Intelligence (DGGI) on Tuesday started investigating Alkem Laboratories in two separate cases, Zee Business learned from sources. 

In its investigation against Alkem Labs, the DGGI found that the company allegedly got tax exemption by showing doctors' gifts as expenses, wherein it was taking input tax credit even after the expiration of the medicine period, and that people in Sikkim were getting tax exemptions despite not manufacturing medicines, according to the sources. 

The drug maker categorically denied the allegations.  

"We categorically deny that the DGGI has taken up income tax investigation case as alleged. We also deny the allegation that in the income tax search, the tax department found bogus billing from Sikkim and cash transaction with doctors as alleged," Alkem Laboratories said in response to the report.   

It also denied that it had taken any unlawful input tax credit relating to expired medicines. "We firmly believe that we have taken a correct view of the law," the company said. 

"The Company asserts its commitment to compliance and transparency as mandated under the law," Alkem Labs added. 

Alkem Labs share price

Alkem Labs shares ended one per cent lower at Rs 4,954.2 apiece on Tuesday, having recouped some of their intraday losses after dropping as much as 1.5 per cent to Rs 4,931.4 apiece during the session.