Mumbai, Dec 2 (IANS) Bajaj Auto on Tuesday said it has received a tax demand of Rs 34.74 crore from the Uttarakhand tax authorities over the alleged misclassification of spare parts supplied by the company.
In addition to the demand, a penalty of Rs 3.47 crore has also been imposed, the company said in a regulatory filing.
“The Company has received the order raising tax demand amounting to Rs 34,73,88,774. The demand is raised on account of the alleged misclassification of spare parts supplied by the company,” the automaker said in its regulatory filing.
“The order also imposes penalty amounting to Rs 3,47,38,877. According to tax authorities, company being a manufacturer of automobiles, the spare parts being customised product only used in manufacturing of vehicles would get classified as auto parts disregarding the principle of general rules of interpretation,” it added.
The order was issued by the Deputy Commissioner in Rudrapur, who stated that since Bajaj Auto is a manufacturer of automobiles, the spare parts supplied by the company should be treated as auto parts.
Authorities claimed these parts are customised and used only in the manufacturing of vehicles, and therefore should fall under a different tax category.
Bajaj Auto has disagreed with the order and said it has been classifying its parts correctly for more than thirty years.
The company said its classification follows the General Rules of Interpretation, along with relevant section notes, chapter notes and HSN explanatory notes. It also said that past judicial rulings support its stand.
According to the company, the tax demand is not legally valid, and it plans to contest the order.
It added that the order can be challenged and that it will follow the proper legal process to appeal.
“There is no material impact on financials, operations or other activities of the Company,” it stated.
Shares of Bajaj Auto were trading 0.46 per cent lower at Rs 9,051 on the BSE after the announcement.
–IANS
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