Eicher Motors' appeals for cut in GST, demand cut to Rs 27 crore

Eicher Motors' GST cut: Eicher Motors announced on Friday that a Goods and Services Tax (GST) demand order has been issued by Tamil Nadu tax authorities and has been significantly reduced to Rs 26.97 crore from the original Rs 129.79 crore. 

The initial demand, received from the Additional Commissioner of the Chennai North Commissionerate on December 30, 2023, included a tax demand of Rs 117.99 crore and a penalty of Rs 11.79 crore from Eicher Motors. Following an appeal by Eicher Motors, the GST department has now revised the demand. The new demand for GST stands at Rs 26.97 crore, which includes Rs 24.52 crore in tax and Rs 2.45 crore in penalties.

The dispute centers on the non-reversal of input tax credit related to material returns instead of the output tax liability for the financial year 2017-18. Eicher Motors stated in a regulatory filing that it considers the revised demand to be unsustainable and is exploring all legal routes, including the possibility of filing a further appeal.

The commercial vehicle manufacturer Eiche Motors has also added that the manufacturer does not foresee any significant impact on its financials, operations, or other business activities due to the revised demand. Eicher Motors has emphasised its commitment to handling the issue through the right channels while maintaining its operational stability.

Eicher Motors' unlisted subsidiary VE Commercial Vehicles (VECV) recorded total retail sales of 6,622 units in July 2024, which is higher by 12.7 per cent as compared with the sales of 5,877 units sold in July 2023. VECVs total domestic and export sales during the period were recorded at 6,044 units, which was up by 13.8 per cent on a year-on-year basis and down by 400 units , registering a decline of 5.9 per cent on a year-on-year basis, respectively.

(with PTI inputs)