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Hyundai faces Rs258 crore tax demand over SUV sales
Hyundai Motor India faces a Rs258 crore GST cess demand and matching penalty over SUVs sold between 2017 and 2020, a claim the automaker plans to appeal.
Hyundai Motor India said on Tuesday it has received a demand from tax authorities for ₹258 crore in GST compensation cess, along with an equal amount in penalties, over the alleged underpayment of taxes on certain SUV models sold between September 2017 and March 2020. The company disclosed in a stock exchange filing that the order was issued by the Office of the Commissioner (Appeals) – GST & Central Excise in Tamil Nadu and was received by email on July 21.
The dispute centers on the GST compensation cess, a levy imposed on luxury goods such as SUVs to offset potential revenue losses for states under India’s GST framework, which took effect in 2017. Hyundai, in its regulatory disclosure, said: “The Company has received an Order from Commissioner (Appeals), CGST Dept, Tamil Nadu, confirming GST Compensation Cess demand of ₹258.67 crores along with Penalty of ₹258.67 crores on the allegation of short payment of GST Compensation Cess on Certain SUV Models for the period September 2017 - March 2020.”
Hyundai confirmed it is currently reviewing the order and plans to challenge it. “HMIL is of the view that the amendment and the clarifications given by the Central Board of Indirect Tax and Customs (CBIC) to resolve the issue faced by the industry on this matter are in favour of the company,” an HMIL spokesperson said in a statement. “We are in the process of reviewing the order and will exercise the right to seek a legal remedy through an appropriate forum.”
Despite the size of the tax demand, Hyundai noted the order would not have any immediate financial or operational impact.
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