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The order is imposed under Section 73 of Maharashtra GST Act, 2017.“>
New Delhi: Two- and three-wheeler maker Bajaj Auto on Friday received an order with tax demand of over Rs 138 crore from the Deputy Commissioner of State Tax, Pune.
The order is imposed under Section 73 of Maharashtra GST Act, 2017.
“The Company has received the Order with tax demand amounting to Rs 1,38,53,14,020. The tax demand mainly relates to differential tax liability between specific HSN classification adopted by the Company with GST rate of 18% as against general HSN classification of auto parts alleged by tax authorities with a GST rate of 28%,” Bajaj Auto informed the stock exchanges on Saturday.
According to tax authorities, as an automobile manufacturer, the company’s custom-made spare parts, used solely in vehicle production, are classified as auto parts subject to a 28% GST rate, ignoring the general rules of interpretation. The Order also imposes an applicable interest and penalty of Rs 13,85,49,375, it said.
Meanwhile, Bajaj Auto has said it has a strong case on merits as it has been consistently classifying its parts and accessories over more than 3 decades following the General Rules of Interpretation, relevant section notes, chapter notes and HSN Explanatory notes which are supported by various judicial precedents.
“Such specific HSN classification has been accepted by the tax authorities over the years. Therefore, the Company believes that the Order lacks merit and stated tax demand is not maintainable as per law,” said the automaker.
“The said Order is an appealable order and the Company has initiated appropriate legal action as per law. The Company does not expect any material impact on its financials, operations or other activities,” it added.
The HSN (Harmonized System Nomenclature) code, developed by the World Customs Organization (WCO), is an internationally recognised system for classifying goods. Used by over 200 countries, it forms the basis for customs tariffs globally.
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The Order also imposes an applicable interest and penalty of Rs 13,85,49,375, it said.
Read by: 100 Industry Professionals
Read by 100 Industry Professionals
The order is imposed under Section 73 of Maharashtra GST Act, 2017.“>
New Delhi: Two- and three-wheeler maker Bajaj Auto on Friday received an order with tax demand of over Rs 138 crore from the Deputy Commissioner of State Tax, Pune.
The order is imposed under Section 73 of Maharashtra GST Act, 2017.
“The Company has received the Order with tax demand amounting to Rs 1,38,53,14,020. The tax demand mainly relates to differential tax liability between specific HSN classification adopted by the Company with GST rate of 18% as against general HSN classification of auto parts alleged by tax authorities with a GST rate of 28%,” Bajaj Auto informed the stock exchanges on Saturday.
According to tax authorities, as an automobile manufacturer, the company’s custom-made spare parts, used solely in vehicle production, are classified as auto parts subject to a 28% GST rate, ignoring the general rules of interpretation. The Order also imposes an applicable interest and penalty of Rs 13,85,49,375, it said.
Meanwhile, Bajaj Auto has said it has a strong case on merits as it has been consistently classifying its parts and accessories over more than 3 decades following the General Rules of Interpretation, relevant section notes, chapter notes and HSN Explanatory notes which are supported by various judicial precedents.
“Such specific HSN classification has been accepted by the tax authorities over the years. Therefore, the Company believes that the Order lacks merit and stated tax demand is not maintainable as per law,” said the automaker.
“The said Order is an appealable order and the Company has initiated appropriate legal action as per law. The Company does not expect any material impact on its financials, operations or other activities,” it added.
The HSN (Harmonized System Nomenclature) code, developed by the World Customs Organization (WCO), is an internationally recognised system for classifying goods. Used by over 200 countries, it forms the basis for customs tariffs globally.
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