In a recent development, Maruti Suzuki India announced on Wednesday that the Gujarat Goods and Services Tax (GST) authority has upheld a tax demand of Rs 173.9 crore, coupled with a penalty of Rs 17.4 crore, against its subsidiary, Suzuki Motor Gujarat Pvt Ltd. The subsidiary company is set to challenge this order by moving to the first appellate authority.
The adjudication order, dated December 21, 2023, was issued by the Gujarat GST authority, affirming the demand and penalty related to tax liability under the reverse charge basis on certain services. The specified period for this tax liability spans from July 2017 to August 2022, according to Maruti Suzuki's exchange filing.
Notably, Suzuki Motor Gujarat (SMG) had already cleared the tax amount of Rs 173.9 crore before the issuance of the show-cause notice. In response to the authority's decision, Maruti Suzuki India stated that SMG intends to file an appeal against the order, seeking relief from the first appellate authority.
The company sought to reassure stakeholders, mentioning that the order is not anticipated to have a significant impact on its financial, operational, or other activities.
On the stock market front, Maruti Suzuki shares experienced a decline of 1.19 per cent, closing at Rs 10,075.45 on Wednesday.
This development raises questions about the taxation challenges faced by major players in the automotive sector and emphasizes the importance of regulatory compliance in an evolving business landscape. As the subsidiary prepares to contest the authority's decision, industry observers will be keenly watching the proceedings to gauge potential implications for other businesses operating under similar circumstances.
CAclubindia
