M&M receives Rs 14.3 lakh penalty notice for its former arm's erroneous input tax credit application

18 Aug 2023 , 02:21 AM

On Friday, Mahindra & Mahindra Ltd announced that it had been fined more than Rs 14.3 lakh for the improper input tax credit that former Mahindra Vehicle Manufacturers Ltd, which has since been amalgamated with it, had taken advantage of during the switch from the excise regime to the GST regime.

The company stated in a regulatory filing that it is optimistic of a favourable outcome at the appeal level based on its evaluation, the applicable law, and the counsel’s recommendations.

‘The company has received an order from Joint Commissioner, CGST & Central Excise, Pune-I Commissionerate imposing a penalty of Rs 14,31,571 under applicable provisions of the CGST Act, 2017 in relation to erstwhile Mahindra Vehicle Manufacturers Ltd (MVML),’ the statement stated.

The ruling further stated, ‘The authority has ordered for recovery of the same along with interest’ and ‘The order has been passed on the basis that incorrect input tax credit (ITC) has been availed of by MVML during the transition from excise regime to GST regime.’ The corporation acknowledged receiving the order, which was dated July 20, 2023, on August 17, 2023.

The business ‘is hopeful of a favourable outcome at the appellate level based on the company’s assessment, prevailing law, and the advice of the counsel,’ M&M said, adding that it does not reasonably expect the ruling to have any major financial impact on it.

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