Maruti, Tata, Mahindra, Hyundai get a Rs 10,000 crore tax notice

Top carmakers successful India person been issued taxation notices for failing to wage compensation cess levied connected GST amounting to astir Rs 10,000 crore.

According to media reports, CGST offices crossed assorted jurisdictions person sent taxation notices to brands similar Maruti Suzuki, Tata Motors, Mahindra and Hyundai implicit pending dues pertaining to vehicles sold earlier 2022.

The authorities charges 28% GST connected inferior vehicles and a compensation of 22% of the GST. In July 2022, the GST Council clarified that the cess volition beryllium applicable connected each SUVs with an motor capableness of 1,500cc oregon more, those longer than 4 meters, and a crushed clearance of 170 mm.

Finance Minister Nirmala Sitharaman has justified the imposition of cess connected SUVs. She said that the instrumentality was lone clarified successful 2022 and not changed. However, immoderate judge that the GST Council should regularize this contented connected ‘as is, wherever is’ ground successful the involvement of each stakeholders.

Source: CNBCTV18

Link to Team-BHP News

I don't person batch of inheritance connected finance, GST and compensation cess, truthful this mightiness beryllium a newbie question.

Does this bespeak that 15% to 22% further compensation cess is inactive not paid by the companies for the cars sold astir 2 years back?
How agelong does the wealth beryllium with dealership and car shaper earlier it is sent to government?

This appears to beryllium a lawsuit of OEMs charging incorrectly. They person considered 20% cess alternatively of 22% connected definite people of vehicles (MUV)

Customers paid little and determination is nary mode these OEM's tin present retrieve from the extremity customer. The archetypal quality positive involvement positive penalties are what these OEMs person been asked to pay. As of now, GOI is precise clear, the mentation of the regularisation per convenience cannot beryllium taken for granted. So, unless determination is simply a alteration successful stance, each specified OEMs volition person to pay. It won't marque immoderate difference/ costs to buyers successful immoderate way.

Industry response

In July 2022, the GST Council clarified that the cess would use to each inferior vehicles. Later, successful December 2022, it further specified that the taxation and cess would beryllium applicable to each SUVs with an motor capableness exceeding 1,500 cc, a magnitude greater than 4 metres, and a crushed clearance of astatine slightest 170 mm.
The retrospective exertion of these clarifications could airs important challenges for manufacturers who are incapable to retrieve the further indirect taxes from consumers.
Meanwhile, the Society of Indian Automobile Manufacturers (SIAM) has requested involution from the Ministry of Finance connected this matter. Earlier, Finance Minister Nirmala Sitharaman defended the imposition of the cess, stating that the instrumentality was lone clarified, not changed, successful 2022.

https://www.business-standard.com/in...1500607_1.html

Quote:

Originally Posted by TusharK

According to media reports, CGST offices crossed assorted jurisdictions person sent taxation notices to brands similar Maruti Suzuki, Tata Motors, Mahindra and Hyundai implicit pending dues pertaining to vehicles sold earlier 2022.

The authorities charges 28% GST connected inferior vehicles and a compensation of 22% of the GST. In July 2022, the GST Council clarified that the cess volition beryllium applicable connected each SUVs with an motor capableness of 1,500cc oregon more, those longer than 4 meters, and a crushed clearance of 170 mm.

So the authorities has sent a announcement asking for the "22% Compensation Cess" that is

charged connected top

of the 28% GST magnitude already charged connected inferior vehicles, right? Seems these manufacturers person not paid this 22% Compensation Cess for vehicles sold earlier 2022.

But, I americium wondering wherefore was Maruti served a notice?
Maruti's biggest motor is the K15C Petrol, and that's mathematically <1,500cc , right? K15C is lone 1462 cc. So, they shouldn't beryllium getting notices. Maruti's largest motor presently is successful the Invicto, which was launched lone successful July 2023.

The Koreans excessively won't person overmuch dues to wage 'coz lone the Hyundai Tucson and the Kia Carnival person engines exceeding 1,500cc. Same is the lawsuit with Tata 'coz lone the Harrier-Safari siblings person 1,900+cc engines.

Therefore, is Mahindra the sole shaper with a monolithic measure to pay???

Quote:

Originally Posted by Turbanator

This appears to beryllium a lawsuit of OEMs charging incorrectly. They person considered 20% cess alternatively of 22% connected definite people of vehicles

So it is the quality of 2% cess postulation that accumulated to 10K crore successful the past 5 years. I couldn't recognize wherefore GST officials didn't raised this during GST instrumentality filing earlier itself. Doesn't companies person to record GST returns each quarter? Or did it kept going successful the accustomed loop betwixt GST officials and companies for 6 agelong years?

India's SUV makers get a ₹10,000 crore taxation notice.

Quote:

"Auto companies relation met with gross caput Sanjay Malhotra successful aboriginal October, seeking alleviation from these GST notices," sources said.

However, the authorities has decided to instrumentality to its guns. Utility vehicles are taxable to a 28% GST, and a compensation of 22% connected the GST.

The latest taxation notices look from a 2022 clarification that specified that the GST compensation cess volition beryllium applicable connected each utility vehicles.

In July 2022, the GST Council clarified that the cess volition beryllium applicable connected each inferior vehicles. Later connected successful December 2022, the Council further explained that the aforesaid taxation and cess volition beryllium applicable for each SUVs with an motor capableness of 1,500 cc oregon more, those longer than 4 metres, and a crushed clearance of 170 millimetres.

Quote:

In the involvement of each the stakeholders, the GST Council could regularize this contented connected ‘as is, wherever is’ ground fixed the genuine doubts connected the Compensation Cess complaint applicable anterior to July 2023 – whether 20% oregon 22%.

Link:

Quote:

Originally Posted by Turbanator

So, unless determination is simply a alteration successful stance, each specified OEMs volition person to pay. It won't marque immoderate difference/ costs to buyers successful immoderate way.

Industry response

The retrospective exertion of these clarifications could airs important challenges for manufacturers who are incapable to retrieve the further indirect taxes from consumers.
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While the manufacturers whitethorn not beryllium capable to retrieve the other costs from the past buyers, surely they are not going to ft the measure from their pockets. Expect recoveries from accrued prices crossed the committee nevertheless tiny they whitethorn be.

Again! Who tin bash concern believing these policies? Quarter-cooked rules, semi-cooked clarifications and over-cooked compensation notices.

Take decisions based connected a thorough survey covering each aspects. Not based connected immoderate ignorant opinions. And person stableness connected decisions. These are affecting not conscionable 1 oregon 2 people. It is affecting the full nation.

15th October 2024, 16:59	#2
BHPian Join Date: Jul 2024 Location: Hyderabad Posts: 272 Thanked: 501 Times Infractions: 0/1 (5)	Re: Maruti, Tata, Mahindra, Hyundai get a Rs 10,000 crore taxation notice I don't person batch of inheritance connected finance, GST and compensation cess, truthful this mightiness beryllium a newbie question. Does this bespeak that 15% to 22% further compensation cess is inactive not paid by the companies for the cars sold astir 2 years back? How agelong does the wealth beryllium with dealership and car shaper earlier it is sent to government?

15th October 2024, 20:24	#6
BHPian Join Date: Feb 2022 Location: Chennai Posts: 620 Thanked: 3,063 Times	Re: Maruti, Tata, Mahindra, Hyundai get a Rs 10,000 crore taxation notice Quote: Originally Posted by Turbanator This appears to beryllium a lawsuit of OEMs charging incorrectly. They person considered 20% cess alternatively of 22% connected definite people of vehicles So it is the quality of 2% cess postulation that accumulated to 10K crore successful the past 5 years. I couldn't recognize wherefore GST officials didn't raised this during GST instrumentality filing earlier itself. Doesn't companies person to record GST returns each quarter? Or did it kept going successful the accustomed loop betwixt GST officials and companies for 6 agelong years?

15th October 2024, 20:43	#8
BHPian Join Date: May 2021 Location: Ponda Posts: 314 Thanked: 892 Times Infractions: 0/1 (4)	Re: Maruti, Tata, Mahindra, Hyundai get a Rs 10,000 crore taxation notice Quote: Originally Posted by Turbanator So, unless determination is simply a alteration successful stance, each specified OEMs volition person to pay. It won't marque immoderate difference/ costs to buyers successful immoderate way. Industry response The retrospective exertion of these clarifications could airs important challenges for manufacturers who are incapable to retrieve the further indirect taxes from consumers. [/url] While the manufacturers whitethorn not beryllium capable to retrieve the other costs from the past buyers, surely they are not going to ft the measure from their pockets. Expect recoveries from accrued prices crossed the committee nevertheless tiny they whitethorn be.

Maruti, Tata, Mahindra, Hyundai get a Rs 10,000 crore tax notice

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