GST Demand Issued Over Erroneous Refund Claims by Lyka Labs Ltd
Lyka Labs Limited has received a Show Cause-cum-Demand Notice from the Office of the Principal Commissioner of CGST & Central Excise, Mumbai East. The notice relates to an alleged erroneous refund claim totaling Rs 73,22,077/- made by the company over a period spanning F.Y. 2020-21 to 2024-25.The demand arises from the contravention of Rule 96(10) of the CGST Rules, 2017. The authority has alleged that Lyka Labs availed ineligible refunds of Integrated Goods and Service Tax (IGST) on exports made under Advance Authorization, resulting in the availment of a double benefit.
The total IGST amount against exports undertaken by the company under advance licenses for the period F.Y. 2021-22 to F.Y. 2024-25 was identified at Rs 67,92,481/-. Detailed figures related to these exports are presented below:
| FY | Invoice Number | Taxable Value | IGST Amount against Advance License |
|---|---|---|---|
| 2021-22 | LYK/21-22/035 | 50,89,000 | 508 |
| 2021-22 | LYK/21-22/064 | 1,33,55,980 | 6,61,122 |
| 2021-22 | LYK/21-22/072 | 54,57,675 | 7,469 |
| 2021-22 | LYK/21-22/094 | 2,35,77,832 | 8,873 |
| 2022-23 | LYK/22-23/020 | 2,08,32,210 | 5,229 |
| 2022-23 | LYK/22-23/022 | 34,60,500 | 4,15,260 |
| 2022-23 | LYK/22-23/073 | 47,22,000 | 8,44,520 |
| 2022-23 | LYK/22-23/074 | 47,22,000 | 4,722 |
| 2022-23 | LYK/22-23/106 | 24,54,000 | 2,94,480 |
| 2022-23 | LYK/22-23/127 | 1,05,03,675 | 6,68,304 |
| 2023-24 | LYK/23-24/053 | 1,08,10,800 | 19,45,944 |
| 2023-24 | LYK/23-24/062 | 58,77,300 | 3,35,376 |
| 2023-24 | LYK/23-24/0144 | 44,38,800 | 4,439 |
| 2024-25 | LYK/24-25/0034 | 61,95,000 | 3,09,750 |
| 2024-25 | LYK/24-25/0035 | 13,00,950 | 64,915 |
| 2024-25 | LYK/24-25/0057 | 1,01,79,750 | 12,21,570 |
The company also reported that IGST amount claimed for exports made with a 0.1% tax rate (F.Y. 2020-21 to F.Y. 2023-24) totaled Rs 5,29,596/-.
Lyka Labs Limited has contested the demand, stating that it is exercising its right to defend against the allegations. The company contended that the omission of Rule 96(10) of the CGST Rules in October 2024 without a saving clause renders the continuation of proceedings legally untenable. Management further asserted there is no material impact on the financials or operations of the Company.
The GST authorities maintain that the refund of IGST paid on export of goods, amounting to Rs 73,22,077/-, was wrongly taken by the taxpayer in violation of Rule 96(10) of CGST Rules, 2017, as amended. The authority noted that the company simultaneously availed benefits of exemption under imports (Notification No.40/2017 and Notification No.41/2017), which restricts refund claims under the specified rules.
LYKALABS Stock Price Movement
Lyka Labs Limited shares edged higher today after the post-market trading session settled at ₹70.51, representing a 1.00% gain. The equity closed on this move with total traded volume reaching 23,639 shares.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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