Bajaj Auto Faces Over ₹34 Crore GST Demand and Customs Duty Penalty in Battery Import Case
Bajaj Auto: Bajaj Auto, one of India's largest two-wheeler manufacturers, has been in the news after receiving a significant duty and tax demand from government officials.
Bajaj Auto, a leading two-wheeler producer in India, is making headlines because of large taxes and duties claimed against it by government authorities. Although it isn't uncommon within the sector, the fact that it relates to lithium-ion batteries and the amount of the claim makes it more prominent.
Bajaj Auto has made an announcement on NSE and BSE that it received an order from the Commissioner of Customs (Export), based at New Customs House, Mumbai. The disagreement arose based on the classification of lithium-ion batteries imported by Bajaj Auto. The lithium-ion batteries are critical components of electric vehicles and automotive systems.
According to the order, the authorities have rejected Bajaj Auto's claim for duty benefits under Notification No. 51/96. A total differential customs duty claim of ₹76,10,620 has been made. A corresponding penalty of the same amount has also been imposed. A redemption fine of ₹60,00,000 has also been imposed.
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The Customs Department alleges that the company classified battery imports in the wrong tax category, resulting in the demand for additional duty and penalties.
In its regulatory filing, the company clarified that the classification of battery imports was correct, the duty benefits under the notification were justified, the order is appealable, and the company is in the process of filing an appeal.
Bajaj Auto also stated that the order will not have any major financial impact on its operations. This indicates that the company expects the matter to be resolved without impacting production or sales.
In addition to the customs dispute, Bajaj Auto has also received an order from the Deputy Commissioner of Rudrapur for ₹34.73 crore in GST and a penalty of ₹3.47 crore. The dispute in this case concerns the tax classification of spare parts sold by the company.
Tax officials argue that since Bajaj Auto is a vehicle manufacturer, its spare parts are customized for automobile use. Therefore, they should be taxed under the category of automobile parts, which falls under the higher GST rate.
This reclassification is the basis for the large GST claim. Bajaj Auto has not yet commented on the possibility of appealing this order. However, companies typically appeal in such cases when there is a dispute over interpretation.
