Facing GST heat | A telling pattern: In pharma, different firms buy electoral bonds on same days

Incidentally, in March 2022, the Directorate General of Goods and Services Tax Investigation (DGGI) had started a probe against several pharmaceutical companies for alleged tax evasion including Glenmark Pharma, Cipla, Mylan and Aurobindo Pharma.

An illustrative example: On one particular day, November 10, 2022, major pharma companies including Cipla, Dr Reddy’s, and Ipca Laboratories purchased bonds totalling close to Rs 50 crore.

From pharmaceutical companies buying electoral bonds en masse in 2022 to construction companies lining up to purchase them in 2019 and 2023, the electoral bonds data released by the Election Commission of India reveals a telling pattern: companies in specific sectors bought bonds in apparent tandem over a span of just a few days. In some cases, this coincides with regulatory or investigative action some of them faced.

An illustrative example: On one particular day, November 10, 2022, major pharma companies including Cipla, Dr Reddy’s, and Ipca Laboratories purchased bonds totalling close to Rs 50 crore. A day later, Glenmark and Mankind also purchased bonds in several tranches worth over Rs 30 crore. Three days later, on November 14, Alembic Pharmaceuticals, Alkem Laboratories and Piramal bought bonds worth over Rs 20 crore.

Incidentally, in March 2022, the Directorate General of Goods and Services Tax Investigation (DGGI) had started a probe against several pharmaceutical companies for alleged tax evasion including Glenmark Pharma, Cipla, Mylan and Aurobindo Pharma.

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Earlier, on January 5, 2022, Aurobindo Pharma had purchased electoral bonds worth Rs 3 crore, while Torrent Pharma bought bonds worth Rs 10 crore two days later on January 7, 2022. Aurobindo Pharma again purchased electoral bonds worth Rs 15 crore on April 8, 2022 and the same day, MSN Pharmachem too bought bonds worth Rs 20 crore.

In July 2022, pharmaceutical companies again showed a surge in collective purchases of electoral bonds. While on July 1, Natco Pharma purchased bonds worth Rs 12 crore, the very next day on July 2, Aurobindo Pharma bought bonds worth Rs 1.5 crore. On October 10, 2022, four pharmaceutical companies bought bonds: Ajanta Pharma (Rs 3 crore), Intas Pharma (Rs 20 crore), Torrent Pharma (Rs 15 crore), and Natco Pharma (Rs 3 crore). Next day, on November 11, 2022, Glenmark Pharma bought electoral bonds worth Rs 9.75 crore, while Mankind Pharma bought bonds of the amount Rs 24 crore.

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Incidentally, in November 2022, the Enforcement Directorate (ED) had arrested a director of Aurobindo Pharma as part of its investigation into the alleged irregularities in the now-scrapped liquor policy of the Delhi government.

Another pharma giant, Sun Pharma, was reported in May 2019 as being under the scanner for alleged tax evasion of service tax. On May 8, the company purchased electoral bonds worth Rs 10 crore, after having bought Rs 21.5 crore on April 15, 2019.

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On May 7, 2019, Torrent Pharma also purchased electoral bonds worth Rs 2.5 crore, while on May 10, 2019, it again bought bonds worth Rs 5 crore.

On July 10, 2019, Cipla had purchased electoral bonds worth Rs 7 crore and worth Rs 8 crore on October 3, 2019. Within a gap of two days, on October 5, 2019, Natco Pharma purchased electoral bonds worth Rs 25 lakh.

The closely sequenced purchases of electoral bonds continued in later years as well. In 2021, Aurobindo Pharma purchased electoral bonds worth Rs 2.5 crore on April 3, 2021. Four days later, Torrent Pharma also bought bonds worth Rs 7.5 crore on April 7, 2021.

In its Annual Report for 2022-23, the DGGI had mentioned non-payment of tax on import of services such as expenses on intellectual property rights (IPR), patent, technology & dossiers expenses as one of the emerging areas of evasion of GST.

Soumyarendra Barik

Soumyarendra Barik is a Special Correspondent with The Indian Express, specializing in the complex and evolving intersection of technology, policy, and society. With over five years of newsroom experience, he is a key voice in documenting how digital transformations impact the daily lives of Indian citizens. Expertise & Focus Areas Barik’s reporting delves into the regulatory and human aspects of the tech world. His core areas of focus include: The Gig Economy: He extensively covers the rights and working conditions of gig workers in India. Tech Policy & Regulation: Analysis of policy interventions that impact Big Tech companies and the broader digital ecosystem. Digital Rights: Reporting on data privacy, internet freedom, and India's prevalent digital divide. Authoritativeness & On-Ground Reporting: Barik is known for his immersive and data-driven approach to journalism. A notable example of his commitment to authentic storytelling involves him tailing a food delivery worker for over 12 hours. This investigative piece quantified the meager earnings and physical toll involved in the profession, providing a verified, ground-level perspective often missing in tech reporting. Personal Interests Outside of the newsroom, Soumyarendra is a self-confessed nerd about horology (watches), follows Formula 1 racing closely, and is an avid football fan. Find all stories by Soumyarendra Barik here. ... Read More

Aanchal Magazine

Aanchal Magazine is a Senior Assistant Editor with The Indian Express, serving as a leading voice on the macroeconomy and fiscal policy. With over 13 years of newsroom experience, she is recognized for her ability to decode complex economic data and government policy for a wider audience. Expertise & Focus Areas: Magazine’s reporting is rooted in "fiscal arithmetic" and economic science. Her work provides critical insights into the financial health of the nation, focusing on: Macroeconomic Policy: Detailed tracking of GDP growth, inflation trends, and central bank policy actions. Fiscal Metrics: Analysis of taxation, revenue collection, and government spending. Labour & Society: Reporting on labour trends and the intersection of economic policy with employment. Her expertise lies in interpreting high-frequency economic indicators to explain the broader trajectory of the Indian economy. Personal Interests: Beyond the world of finance and statistics, Aanchal maintains a deep personal interest in the history of her homeland, Kashmir. In her spare time, she reads extensively about the region's culture and traditions and works to map the complex journeys of displacement associated with it. Find all stories by Aanchal Magazine here ... Read More

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