Maruti Suzuki India (MSIL) on Thursday requested the central government to introduce an amnesty scheme or an “as-is” settlement option to resolve past indirect tax litigation, enabling the automobile industry to clear legacy legal hurdles and focus on growth.
Speaking at the third Society of Indian Automobile Manufacturers (SIAM) Automotive Tax Conference, the chief financial officer of Maruti Suzuki India, emphasised that resolving historical tax disputes was critical to providing long-term certainty for businesses.
He said the government must find a “smarter way to address the past”.
“Because now that we have room for the future due to GST 2.0, we need to find a smarter way to address past litigation. Either we take an as-is position, or we find some kind of amnesty solution so that we can really get these past litigations out of the way in a smarter way,” he said.
An amnesty scheme is a government relief programme that allows companies to pay the principal tax dues while waiving interest and penalties. An “as-is” settlement would involve accepting past tax filings as final without raising retrospective demands.
He call for an amnesty mechanism comes as Maruti Suzuki and its wholly owned subsidiary, Suzuki Motor Gujarat, have been involved in multiple indirect tax disputes in recent years.
In January 2024, the Gujarat Goods and Services Tax authority passed an order upholding a tax demand of ₹173.9 crore, along with a penalty of ₹17.4 crore, against Suzuki Motor Gujarat over reverse-charge GST liability on certain services for the period from July 2017 to August 2022.
In October 2024, the Haryana GST Commissioner (Appeals) also upheld a tax demand of ₹139.3 crore against Maruti Suzuki for the same period. The carmaker has also been contesting customs-related notices and other state GST matters.
He, in his address at the conference, credited recent reforms under “GST 2.0”, particularly the decision to maintain a uniform tax rate for automobile parts, with boosting demand without creating supply-side bottlenecks.
“The industry per se has grown by 25 per cent, which itself talks about the impact of the new reform that has come in,” he said, while requesting the government to introduce a similar single-rate structure for customs duties.
A major demand raised by him was the seamless transfer of central input tax credit across different state GST registrations. Input tax credit allows businesses to offset the tax paid on purchases against the tax payable on sales.
He said companies setting up large manufacturing plants often accumulate significant tax credits at specific locations.
“At least if the central part is seamless, because ultimately it is one revenue bucket, things become much smoother. It can unlock a lot of working capital that is locked into it and reduce a lot of procedural hassles involving the filing of refunds and so on,” he said.
He added that large exporters such as Volkswagen also faced substantial accumulation of input tax credit because of the current registration-based system.
He also called for better alignment between the Companies Act and tax laws to avoid disputes arising from differing definitions, such as the treatment of capital and revenue expenditure.
The chief financial officer urged the government to issue clearer guidance on eligible GST input tax credits and product classification to reduce avoidable litigation.
To speed up dispute resolution, he advocated expanding advance pricing agreements to cover transfer pricing, customs and GST. Advance pricing agreements are formal arrangements between taxpayers and tax authorities that determine in advance how specified transactions will be taxed.
He also called for involving international trade partners in such agreements, setting up independent appellate review mechanisms, and creating regular industry-government forums outside courts.
He also urged tax professionals to adopt a digital-first mindset, move away from legacy processes, and shift from defending tax disputes after transactions to planning tax strategies before transactions.
He said tax teams should be integrated into five-year business plans, supply-chain design and modular manufacturing operations.
