Maruti Suzuki India has recently stated that it has received a show cause notice from the GST Authority. This Show cause notice proposed a demand interest and penalty besides appropriate tax already paid, amounting to Rs 139.3 crore.
The issuance of this notice is connected to a tax liability, specifically related to the reverse charge mechanism applied to certain services spanning a period from July 2017 to August 2022. The company officially disclosed this information by means of a regulatory filing.
The company has stated that it will submit a response to the show cause notice with the Adjudicating Authority. Additionally, Maruti Suzuki India has emphasised that the notice has not had any adverse effects on its financial stability, operations, or other business activities.
In addition to the previous disclosure, Maruti Suzuki India also reported a noteworthy development in its legal matters. The company received a highly favourable decision from the High Court of Punjab and Haryana. This legal ruling relates to a series of appeals that were initiated by the Central Excise Department. These appeals covered a time frame spanning from June 2006 to March 2011.
The brief of the matter was that the Central Excise Department had challenged a prior decision made by a tribunal back in August 2016. This tribunal decision had been in favour of Maruti Suzuki India. It had allowed the company to claim input service credit for specific services and, importantly, had dropped the penalty that had been imposed on the company.
The significance of this favourable ruling lies in the fact that it upheld the tribunal’s decision, essentially endorsing the company’s position on the matter. As a result, the appeals filed by the Central Excise Department were dismissed by the High Court.
This ruling not only reaffirms the company’s legal standing but also carries financial implications, as it means that Maruti Suzuki India does not have to bear the burden of the contested tax and penalty amount.
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