Maruti Suzuki Challenges ₹2.5 Crore Tax Demand in Supreme Court

18 Apr 2024 , 12:27 PM

Maruti Suzuki, a leading player in the Indian automotive industry, made a significant announcement regarding a tax demand it received from the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in Chandigarh, amounting to ₹2.5 Crore.

This disclosure indicates a legal challenge ahead, with Maruti Suzuki expressing its intention to contest the demand in the Supreme Court, despite a revision reducing the total demand to ₹25 million, as mentioned in an official exchange filing.

The tax demand is associated with a four-year period spanning from April 15, 2006, to March 31, 2010, initially estimated at ₹11.5 Crore before being revised down to ₹2.5 Crore.

Detailed information from the exchange filing reveals that CESTAT, Chandigarh, partially allowed Maruti Suzuki’s appeals concerning service tax liability under the reverse charge basis on certain services for the mentioned period.

The reduction from the original total demand of ₹115 million to the revised total demand of ₹25 million suggests a substantial adjustment made by the tribunal, reflecting a significant difference in the tax obligation.

Despite the impending legal proceedings, Maruti Suzuki maintains confidence in its financial stability and operational resilience, asserting that the outcome of the case is not anticipated to exert a major impact on the company’s overall performance or strategic activities.

This development underscores the complex regulatory landscape faced by companies operating in India, highlighting the importance of diligent compliance and proactive engagement in addressing legal challenges.

Maruti Suzuki’s decision to contest the tax demand in the apex court reflects its commitment to safeguarding its interests and upholding transparency in its financial dealings, demonstrating a proactive approach to resolving disputes and maintaining shareholder confidence.

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