Piramal Enterprises Gets ₹1,502 Crore Tax Demand

28 Feb 2025 , 09:00 PM

Piramal Enterprises Ltd (PEL) has received a tax demand notice amounting to ₹1,502 crore from the GST Department, Maharashtra, for the financial year 2020-21. The Deputy Commissioner of State Tax, Maharashtra issued a notice dated February 27, 2025, under 73(9) of the CGST/SGST Act 2017. It includes alleged short payment, non-payment of tax along with interest and penalties.

The tussle follows a ₹4,487 crore slump sale by Piramal Enterprises of its pharma business to Piramal Pharma Limited (PPL) in FY21, which involved transfer of subsidiary companies.

GST Department contends that the transaction was not a slump sale but was a sale of items and therefore, 18% GST is payable on full value of sale (including good will). The department further considered the sale of investments, which are generally outside the ambit of GST, as taxable transactions.

The order has been strongly challenged by Piramal Enterprises, which has said it has “more than adequate grounds” to defend itself. While the GST, interest and penalties levied by the company were unjustified, there are plans to challenge the ruling, legal action is likely to follow, the company said.

The company expects a favourable outcome and it will take appropriate legal steps in this regard in its best interest, Piramal said. The firm said the tax demand will not affect its balance sheet or profit and loss account for the financial year.