Hyundai Motor India gets ₹517 Crore tax demand notice

Hyundai Motor India Ltd informed the shareholders and bourses that it has received an order from Indian tax authorities demanding ₹258 Crore in GST compensation cess. In addition to this, the company is also asked to pay an equal amount in penalties. The demand relates to underpayment of taxes on certain SUV models sold between September 2017 and March 2020.

In its filing with the bourses, the company disclosed that it has received the order from the Office of the Commissioner (Appeals) – GST & Central Excise, Tamil Nadu.

The dispute is related to an alleged short payment of the GST compensation cess. This cess is chargeable on luxury items such as SUVs for compensating Indian states owing to potential loss of revenue under the GST regime. This came into force in 2017.

Hyundai India noted that it is currently reviewing the order and intends to file an appeal against the said order.

Eleven though the demand is huge in amount, the company assured that it would not have any immediate financial or operational impact on the company.

The company has not identified the SUV models named in the demand order as of now.

One HIML Spokesperson commented that the company is of the view that the amendment and the clarifications announced by the Central Board of Indirect Tax and Customs (CBIC) are in favour of the company.

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