What The Tax Order Stated
The Order states, “The Company has received the Order with tax demand amounting to Rs. 1,38,53,14,020. The tax demand mainly relates to differential tax liability between specific HSN classification adopted by the Company with GST rate of 18% as against general HSN classification of auto parts alleged by tax authorities with GST rate of 28%. According to tax authorities, Company being a manufacturer of automobiles, the entire spare parts being customised product, used only in manufacturing of vehicles would get classified as auto parts at GST rate of 28% disregarding the principle of general rules of interpretation. The Order also imposes applicable interest and penalty of Rs 13,85,49,375.”
Auto’s Response
Bajaj Auto has challenged the merits of the Order. “The Company believes that it has strong case on merits as it has been consistently classifying its parts and accessories over more than 3 decades following the General Rules of Interpretation, relevant section notes, chapter notes and HSN Explanatory notes which are supported by various judicial precedents. Such specific HSN classification has been accepted by the tax authorities over the years. Therefore, Company believes that the Order lacks merit and stated tax demand is not maintainable as per law.” the regulatory filling stated.
