Bajaj Auto on Tuesday said it has been served a tax demand of ₹34.74 crore, along with a penalty of ₹3.47 crore, by the Deputy Commissioner, Rudrapur, under Section 73 of the CGST Act, 2017.
The communication, received on 1 December, pertains to what the tax authorities have termed a misclassification of spare parts supplied by the company.
The order states that because Bajaj Auto is an automobile manufacturer, its spare parts—being customised and used in vehicle manufacturing—should be classified as auto parts. The authority held that this classification applies irrespective of the General Rules of Interpretation.
Bajaj Auto said it has been classifying parts and accessories in the same manner for over three decades, relying on the General Rules of Interpretation, relevant section and chapter notes, HSN explanatory notes and judicial precedents.
It stated that the tax demand is “not maintainable in law” and confirmed that the order is appealable.
The company added that it will pursue legal remedies and does not expect any material impact on its financials, operations or other activities.
Source #ET
