Indian multinational automotive company Eicher Motors announced on Friday,August 2, that a substantial reduction in its GST demand has been granted. The original GST order from December 30, 2023, issued by the CGST and Central Excise office in Chennai, was slashed from Rs 129.79 crore to Rs 26.97 crore following an appeal by the company.
This adjustment, which trims over Rs 100 crore from the initial demand, relates to the non-reversal of input tax credit for returned materials in FY18. The company had initially accounted for this by paying an output tax liability. The revised order now includes a tax demand of Rs 24.52 crore and a penalty of Rs 2.45 crore, down from the original Rs 117.99 crore demand and Rs 11.79 crore penalty.
In December 2023, Eicher Motors disclosed that the GST officer had disallowed certain GST credits, leading to the tax demand primarily due to discrepancies between the company's GST credit claims and the details reported by suppliers. This mismatch involved differences between GSTR-3B and GSTR-1 returns, and issues related to the input tax credit on returned materials.
Eicher Motors' shares were trading at Rs 4,725 around 2 pm, showing a decrease of 4.75% from the day's high. The company has stated that it views the revised demand as untenable and is considering all options, including filing an appeal. Eicher Motors added that it does not expect the revised demand to impact its financials, operations, or other activities.
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