Why Patanjali Foods Received a ₹1,352 Cr Tax Notice

28 May 2026, 06:29 by Vinay Kakkad · KalingaTV

Patanjali Foods Limited, led by Baba Ramdev, just got hit with a big show-cause notice from the GST authorities, demanding more than ₹1,352 crore. This came out in an official exchange filing dated May 27, 2026. The Assistant Commissioner (ST) from Royapuram (C) Assessment Circle in North Division, Chennai, Tamil Nadu, issued the notice. Patanjali Foods got the letter on Monday, May 25, 2026, which triggered a mandatory disclosure to the stock exchanges.

The tax demand is rooted in intensified scrutiny of Patanjali Foods earlier tax filings. The Chennai North Division tax officials found discrepancies during their reconciliation process for FY 2022-23. Basically, they noticed differences between Patanjali’s monthly GSTR-3B returns and the GSTR-7 returns submitted by TDS deductors.

The official notice demands exactly ₹1,352.92 crore. This tax bill is split evenly between central and state authorities, with ₹676.46 crore each for CGST and SGST. On top of the main tax amount, the department slapped on a 10% penalty—₹135.29 crore in total, divided equally between CGST and SGST—as well as 18% annual interest for the outstanding FY23 dues.

This legal action was triggered under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017, along with Tamil Nadu’s matching TNGST Act. Section 73 comes into play when tax authorities identify tax shortfalls, missed payments, or errors—not fraud or willful misstatements, which would fall under Section 74.

Patanjali Foods responded by saying it’s working closely with its tax advisors to prepare and submit a detailed reply within the required timeframe. Management remains confident about its legal position, insisting they have enough grounds to defend themselves. The company also clarified that, since this is just a show-cause proceeding, a preliminary step, not a final ruling—there’s no immediate financial hit on its balance sheet. Final financial consequences will depend on how the legal case plays out.