Bajaj Auto Faces GST Tax Demand from Maharashtra Authorities

Bajaj Auto Limited has recently received a substantial tax demand amounting to ₹ 1,38,53,14,020 from the Deputy Commissioner of State Tax in Pune. This demand falls under Section 73 of the Maharashtra GST Act, 2017, prompting the company to take legal action.

Background of the Tax Demand

The primary contention of the tax authorities revolves around the Goods and Services Tax (GST) classification applied by Bajaj Auto. The company has classified specific components under a Higher Standard Number (HSN) code that attracts a GST rate of 18%. However, the authorities argue that these should have been categorized under a different HSN code that carries a GST rate of 28% for auto parts.

Tax Authority’s Position

The tax authorities assert that as an automobile manufacturer, Bajaj Auto’s spare parts are considered customized products strictly used for vehicle manufacturing. This classification demands adherence to a 28% GST rate, which the authorities stated disregards the broader principles governing GST classification.

Financial Implications

In addition to the tax demand, the company faces an additional interest and penalty amounting to ₹ 13,85,49,375 as stipulated in the order. This comprehensive financial implication underscores the gravity of the situation for Bajaj Auto.

Company’s Response

In light of this order, Bajaj Auto has expressed its intention to contest the demand. The company characterized the order as appealable and has initiated the necessary legal measures as per regulatory procedures. In a filing with the exchanges, Bajaj Auto stated, “The said Order is an appealable order and the Company has initiated appropriate legal action as per law.”

Regulatory Context

This disclosure was made in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, highlighting the importance of transparency in corporate governance.