Synopsis:
Maruti Suzuki, one of India's leading automobile manufacturers, has received a show cause notice from the Goods and Services Tax (GST) Authority, amounting to Rs 139.3 crore. The notice raises concerns regarding certain aspects of Maruti Suzuki's GST compliance. While specific details of the notice are not disclosed, it suggests potential discrepancies or irregularities in the company's GST filings or tax payments. Maruti Suzuki is expected to provide a response to the notice, clarifying its position and addressing the concerns raised by the GST Authority. The outcome of this development will impact Maruti Suzuki's financial standing and regulatory compliance obligations. ICCBizNews will closely monitor the situation and provide updates as it unfolds.
Automobile major Maruti Suzuki India on Friday said it has received a showcause notice from the GST Authority proposing to demand interest and impose penalty, besides appropriating tax already paid, amounting to Rs 139.3 crore. The company said the notice pertains to the matter of tax liability under reverse charge basis on certain services for the period of July 2017 to August 2022.
In a regulatory filing, the company said: “Show cause notice has been issued by the GST Authority for the period of July 2017 to August 2022, proposing to demand interest and impose penalty, besides appropriating tax already paid amounting to Rs 139.3 crore in matter of tax liability under the reverse charge basis on certain services.”
According to the company, it will file a reply before the adjudicating authority. “There is no impact on financial, operation or other activities of the company due to this show cause notice.”
The company also said 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. ”The total tax and penalty amount involved in the department’s appeal was Rs 57.2 crore,” the company said.
Earlier this month, Maruti Suzuki India said it has achieved a significant milestone in August 2023 with its highest-ever monthly sales volume, totaling 1,89,082 units.
India's biggest carmaker Maruti Suzuki recorded 1,58,678 units in domestic sales, including various sub-segment models. Total sales of the month include domestic sales of 1,58,678 units, sales to other OEM of 5,790 units and exports of 24,614 units.
Here's a breakdown of the sales figures for August 2023:
Mini Segment (Alto, S-Presso): 12,209 units
Compact Segment (Baleno, Celerio, Dzire, Ignis, Swift, Tour S, WagonR): 72,451 units
Total Mini + Compact Segment: 84,660 units
Mid-Size (Ciaz): 849 units
Total Passenger Cars (A Segment): 85,509 units
Utility Vehicles (Brezza, Ertiga, Fronx, Grand Vitara, Invicto, Jimny, S-Cross, XL6): 58,746 units
Vans (Eeco): 11,859 units
Total Domestic Passenger Vehicle Sales (PV): 156,114 units
Light Commercial Vehicles (LCV) - Super Carry: 2,564 units
Total Domestic Sales including LCV (PV+LCV): 158,678 units
Sales to Other OEM: Maruti Suzuki also supplied 5,790 units to other Original Equipment Manufacturers (OEM).
Total Domestic Sales (PV+LCV+OEM): 164,468 units
Export Sales: The company exported 24,614 units of vehicles in August 2023.
Total Sales (Domestic + Export): The overall sales figure for August 2023 reached an impressive 189,082 units.
Maruti Suzuki India Limited shares have been seen a strong uptrend in 2023. On Friday, Maruti Suzuki's stock closed at Rs 10601.70, up by 0.33 per cent from the previous day's closing price of Rs 10,566.95.
Sunny Agrawal, Deputy Vice-President and Head of Fundamental Equity Research at SBI Securities, picked Maruti Suzuki India as one of his top long-term picks. For Maruti, Agrawal suggested a target price of Rs 12,000 over a 6-12-month duration.
"Healthy demand for its newly-launched SUV portfolio which is leading to the premiumization in the market space. The premium SUV portfolio is growing. A premiumization shift if happening for Maruti which will lead to the margin expansion. In addition, with the festive season ahead of us, the volumes of likely to pretty much healthy over the next three to six months," he stated.
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