Ahmedabad, October 29, 2025:
Zydus Wellness Limited announced that its wholly owned subsidiary, Zydus Wellness Products Limited (ZWPL), has received an Order in Original from the Directorate General of Goods and Services Tax Intelligence (DGGI), Surat Zonal Unit. The order, dated September 30, 2025, and received on October 28, confirms a GST demand of ₹56.33 crore along with applicable interest and penalty.
The order was issued under Section 74(9) of the CGST Act, 2017 and corresponding provisions of the Gujarat GST Act and IGST Act, 2017, following a show-cause notice initially sent in late 2024. The DGGI alleged that GST was payable in connection with the acquisition of certain intellectual property rights from Heinz Italia S.p.A. by Heinz India Pvt. Ltd., which was later merged with ZWPL after its acquisition by Zydus Wellness in 2019.
Zydus clarified that the demand covers the pre-acquisition period—before January 30, 2019—and is therefore fully indemnified by Heinz Italia S.p.A. The company said it has strong grounds to contest the order and is evaluating the next steps for filing an appeal.
In a statement, Zydus emphasized: “ZWPL believes there is strong merit in the case and is evaluating its right to appeal after a detailed review of the order. The period covered predates Zydus’s acquisition of Heinz India, and therefore the financial and operational impact on the company is nil.”
This disclosure, made under Regulation 30 of the SEBI (LODR) Regulations, 2015, ensures transparency on regulatory and tax proceedings affecting the group. The company reiterated that no immediate financial burden would arise from the order.
Industry experts note that such tax demands are not uncommon in merger and acquisition cases, especially where legacy entities are inherited with pending tax interpretations. Since the alleged liability is contractually indemnified, the matter is expected to have no balance sheet impact on Zydus Wellness.
The issue stems from the DGGI’s interpretation of tax obligations related to intellectual property transactions during the transition of Heinz India. However, the company maintains that all due taxes were paid and that the acquisition structure complied fully with prevailing GST laws.
Zydus Wellness, known for brands like Complan, Sugar Free, and Glucon-D, said it remains focused on its operational growth and innovation strategy, unaffected by the order. Analysts believe the case is unlikely to affect investor sentiment, as Zydus’s communication clarified the pre-acquisition nature of the issue and its indemnification status.