Auto major Maruti Suzuki India has said it received tax demand orders from the Goods and Service Tax (GST) departments of three states -- Haryana, Karnataka and Gujarat. Collectively the tax amounts to ₹345.15 crore inclusive of interests and penalties.
The first tax demand is worth ₹139.3 crore by the Haryana GST department for the period July 2017 to August 2022. It comes along with interest and a penalty of ₹13.9 crore under a reverse charge basis on certain services. The second tax demand is worth ₹65 lakh by Karnataka state GST department for the period 2018-19, mainly on account of input tax credit issues.
The third tax demand order is of ₹173.9 crore, along with a penalty of ₹17.4 crore by the Gujarat GST department for the period July 2017 to August 2022, in the matter of tax liability under reverse charge basis on certain services.
Furthermore, Maruti has also said its unit Suzuki Motor Gujarat Private Ltd (SMG) has also been served a show cause notice on January 3, 2024, by the customs department. “It has been alleged that SMG has failed to re-export the returnable racks within the stipulated time period of 6 months. SMG has been directed to pay the differential duty of ₹30,27,431/-, and has also been asked as to why redemption fine, interest & penalty should not be imposed.”
SMG will file a reply against the order to the first appellate authority, says the company.
On Wednesday, Maruti Suzuki said the Gujarat GST authority has confirmed a tax demand of ₹173.9 crore, along with a penalty of ₹17.4 crore, against its wholly owned subsidiary, Suzuki Motor Gujarat Pvt Ltd.
These charges are associated with tax liability under reverse charge basis for specific services during the period from July 2017 to August 2022.
The company says SMG had already settled the tax amount of ₹173.9 crore prior to the show cause notice. The order's impact on the company's financial, operational, or other activities is not expected to be significant, it says, adding that SMG will file an appeal with the first appellate authority.
Amid the announcement, Maruti Suzuki shares declined 0.85% to ₹10,016.00 apiece on BSE today.
Maruti Suzuki had reported 80.3% surge in its profit for the July-September quarter at ₹3,716.5 crore vs ₹2,061.5 crore profit in the same quarter last year. The country's largest automaker achieved its peak quarterly figures for sales volume, net sales, and net profit during this period. The high profit was ascribed to heightened net sales, a decrease in commodity prices, cost-cutting initiatives, and an upswing in non-operating income.
