Maruti Suzuki Gets Rs 139.3 Crore Show-Cause Notice From GST Authority

The notice pertains to the matter of tax liability under a reverse charge basis on certain services for the period of July 2017 to August 2022.

Maruti Suzuki said the company will file a reply to the Show Cause Notice before the Adjudicating Authority.

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Carmaker Maruti Suzuki India on Friday said it has received a show cause notice from the GST Authority proposing to demand interest and impose the penalty, besides appropriating tax already paid amounting to Rs 139.3 crore. The notice pertains to the matter of tax liability under a reverse charge basis on certain services for the period of July 2017 to August 2022.

"Show Cause Notice has been issued by GST Authority for the period July, 2017 to August, 2022 proposing to demand interest and impose penalty, besides appropriating tax already paid amounting to Rs. 1,393 million in matter of tax liability under reverse charge basis on certain services,' the company said in an exchange filing. 

Adding that the company will file a reply to the Show Cause Notice before the Adjudicating Authority and that there is no impact on financial, operation or other activities of the company due to this Show Cause Notice.

Maruti Suzuki, India's largest car manufacturer, reported a strong sales figure for last month, with a total of 1,58,678 units sold, comprising various sub-segment models. The overall sales for August encompassed 1,58,678 units in domestic sales, 5,790 units sold to other original equipment manufacturers (OEMs), and exports totaling 24,614 units.

On Friday, the car manufacturer also reported that it has received a favourable order from the High Court of Punjab and Haryana wherein appeals filed by the Central Excise Department for the period June 2006 to March 2011 have been dismissed. 

The Central Excise Department had filed appeals before the high court against an earlier tribunal order of August 2016, which was passed in favour of the company in which input service credit on certain services was allowed to it and penalty was also dropped against it, the filing said. 

"The total tax and penalty amount involved in the department's appeal was Rs 57.2 crore," the company said.