Eicher Motors’ GST Demand Reduced to Rs 26.97 Crore After Appeal
Eicher Motors announced on Friday that the GST demand orders issued to them on December 30, 2023, by the CGST and Central Excise office in Chennai have been substantially reduced. Initially set at Rs 129.79 crore, the demand has now been revised to Rs 26.97 crore following an appeal by the company.
The significant reduction of over Rs 100 crore is attributed to the non-reversal of input tax credit on returned materials in FY18, which Eicher Motors had promptly addressed by paying the output tax liability. The original order comprised a tax demand of Rs 117.99 crore and a penalty of Rs 11.79 crore, which have been revised to Rs 24.52 crore and Rs 2.45 crore respectively, as per the company’s filing with the stock exchange.
In the preceding year, Eicher Motors had reported that tax authorities disallowed certain GST credits and raised a GST demand, primarily due to discrepancies in GST credits claimed by the company and those reported by their suppliers in GST returns. The issues also involved variances between turnover declared in GSTR-3B and GSTR-1 returns, as well as non-reversal of input tax credit on returned materials, which the company had proactively resolved by paying the output tax liability.
Despite the reduction, Eicher Motors’ shares experienced a decline, trading at Rs 4,725 around 2 pm, down 4.75% from the day’s high. Addressing the revised demand, the Delhi-based company expressed their stance, stating, “Based on the Company’s assessment, the revised demand is not maintainable, and the Company is evaluating all options, including filing an appeal against the order. The Company does not anticipate any significant impact on its financials, operations, or other activities.”
Eicher Motors remains resolute in considering all options, including filing an appeal against the revised demand, as they firmly believe it is unjustified. The company also reassured that they do not expect any substantial impact on their financials, operations, or other activities due to the revised demand.
