Sun Pharma asked to pay Rs 279 crore GST dues on Ranbaxy arbitration

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The Directorate General of Goods and Services Tax Intelligence (DGGI) has asked Sun Pharmaceutical Industries to pay approximately Rs 279 crore in dues to the government, multiple sources told CNBC-TV18. The DGGI claims that Sun Pharma is liable to pay service tax on payments it had made to affiliates of Ranbaxy outside India regarding arbitration, said the sources.

Considering the 2014 deal where Sun Pharma acquired Ranbaxy, Sun Pharma was also supposed to clear the arbitration payments made by Ranbaxy to Daiichi. Thus, with these arbitration proceeds, the revenue authorities have claimed that these proceeds come under the service tax purview and that is how Sun Pharma is likely to clear the tax dues, said the sources. A senior official at the DGGI confirmed the development and told CNBC-TV18 that the directorate is currently in talks with Sun Pharma about the service tax dues.

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