Patanjali Foods Ltd. has received a Goods and Services Tax (GST) order from the Rajasthan tax authorities involving the reversal of input tax credit (ITC), alleged excess or wrongly availed ITC, and the imposition of a penalty amounting to ₹80.37 lakh.
The company, however, has stated that it does not anticipate any financial liability beyond the penalty and has assured investors that the development will not materially impact its business operations.
The disclosure was made through a regulatory filing submitted to the stock exchanges on Wednesday. According to the company, the order has been passed by the Office of the Deputy Commissioner of the Rajasthan GST Department under the provisions of the Goods and Services Tax laws.
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The tax order concerns the reversal of input tax credit and alleged excess or wrongful availment of ITC. While the order includes the reversal of tax credit along with statutory consequences, Patanjali Foods clarified that it expects its financial exposure to remain restricted to the penalty of ₹80,37,898.
The company stated that the order does not warrant any additional financial liability beyond the penalty amount and is not expected to affect its financial position, business operations, or overall functioning.
In its stock exchange filing, the company said, “The Company does not expect any financial liability except to the extent of said penalty amount of ₹80,37,898. It will not have any impact on the financial, operational and other activities of the Company.”
Patanjali Foods has indicated that it does not accept the findings of the tax authorities and intends to pursue legal remedies. The company confirmed that it will file an appeal before the appropriate appellate authority and take all necessary legal steps to contest the GST order.
The decision to appeal suggests that the company believes it has valid legal grounds to challenge the findings relating to the alleged wrongful availment of input tax credit.
The GST development follows another regulatory action involving the company that was disclosed only last week. Patanjali Foods had informed the stock exchanges that the Office of the Assistant Commissioner of Food Safety, Kottayam, directed the recall of a specific batch of wheat flour after laboratory tests detected chlorpyriphos pesticide residue above the prescribed maximum permissible limit.
At that time, the company had clarified that the food safety order would not have any material financial or operational impact, apart from the value of the affected batch that was recalled from the market.
With two regulatory developments emerging within a short span, Patanjali Foods has sought to reassure shareholders and investors that neither matter is expected to materially affect its business performance or financial health.
The company maintains that the GST dispute is confined to the tax proceedings and the associated penalty, while the food safety action relates only to a limited batch of products. As it prepares to challenge the GST order before the appellate forum, Patanjali Foods has reiterated that both issues are limited in scope and do not reflect any broader operational or financial concerns for the company.
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