Patanjali Foods shares slip 4% as the firm gets show cause notice for GST dues

Patanjali Foods share price: Shares of Patanjali Foods on Tuesday, April 30, slipped as much as 4.05 per cent to Rs 1,500.05 apiece on the BSE in the morning deals after the company was served a show cause notice by the GST intelligence department, asking the company to explain why input tax credit worth Rs 27.46 crore should not be recovered from it.

The yoga guru Ramdev-led Patanjali Ayurved Group firm, which is mainly into the edible oil business, has received the notice from the Directorate General of GST Intelligence, Chandigarh Zonal Unit, according to a regulatory filing made by the company on April 26.

"A show cause notice is received by the company... Requiring the company, its officers and authorised signatories to show cause as to why input tax credit amounting to Rs 27,46,14,343 should not be recovered (along with interest), and why penalty should not be imposed...," the company said.

The department has cited Section 74 and other applicable provisions of the Central Goods and Services Act, 2017 and the Uttarakhand State Goods and Services Act, 2017, read with Section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017.

"As of now, the authority has only issued a show cause notice, and the company will be taking all necessary action to defend its case before the authority," Patanjali Foods said.

"... Expected financial implications cannot be determined until the completion of the proceedings," the company added.

Last week, Patanjali Foods said it would evaluate a proposal to acquire the non-food business of promoter group Patanjali Ayurved.

In a regulatory filing, Patanjali Foods informed that its board has discussed the initial proposal received from Patanjali Ayurved Ltd for the sale of the latter's non-food business undertaking to the company.

Incorporated in 1986, Patanjali Foods Ltd, formerly known as Ruchi Soya Industries Ltd, is a leading FMCG player.

The company operates in edible oils, food and FMCG, and wind power generation segments through brands like Patanjali, Ruchi Gold, Nutrela, etc.

Patanjali Ayurved had acquired Ruchi Soya through the insolvency process and later renamed the company Patanjali Foods Ltd.

In a year, shares of the company have jumped more than 61 per cent.