Patanjali Foods Faces GST Penalty for Non-reversal of ITC as per section 17(2)

Patanjali Foods Limited, a leading FMCG company known for its swadeshi and affordable products, has recently received a GST penalty order. The order was issued by the Office of the Commissioner of Central Excise & Central Tax, Mangalore and demands a penalty of Rs 63,32,245 for non-reversal of Input Tax Credit (ITC) as per section 17(2) of the CGST Act, 2017.

The company informed about the receipt of the said order on December 9, 2025, under the mandatory disclosure under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The penalty is related to the Non-reversal of ITC in terms of section 17(2) of the CGST Act, 2017, read with Rule 42/Rule 43 of the CGST Rules, 2017. Section 17(2) mandates the reversal of ITC on the exempt supplies or for the non-business use.

Patanjali Foods stated that the penalty does not have any significant effect on the company beyond the penalty amount. The company has decided to file an appeal before the appellate authority to challenge this penalty order.