Hero MotoCorp receives ₹17.64 crore GST notice from Delhi GST authority

Hero MotoCorp Ltd. received a goods and service tax (GST) demand notice of ₹17.64 crore from the Office of the GST Officer, Government of NCT Delhi's Department of Trade and Taxes, according to the company's Bombay Stock Exchange (BSE) filing on Sunday, August 18.

Hero MotoCorp shares closed 1.02 per cent higher at ₹5,125.80 after Friday's trading session, compared to ₹5,074.05 at the previous market close.

The two-wheeler manufacturer received the GST order dated August 17, 2024, which cites the disallowance of input tax credit for the financial year 2019-20, as per the company's regulatory filing.

Hero MotoCorp is to pay a total of ₹17.64 crore as the demand notice, which is divided into ₹9,38,66,513 or ₹9.38 crore as tax demand under Section 73 of the Central Goods & Service Tax Act, 2017 (CGST Act), ₹7,32,15,880 or ₹7.32 crore as interest on the tax demand, and ₹93,86,651 or ₹93.86 lakh as the penalty fees, according to the company's regulatory filing on the BSE website.

“Based on the Company's assessment, the tax demand is not maintainable in law,” said the two-wheeler maker in the exchange filing. The company also said that the input tax credit disallowed by the GST authorities in New Delhi was rightfully claimed by the company as per the GST law provisions, according to Hero MotoCorp.

The provision of the tax credit was “disallowed on account of the supplier's non-compliance, which is not attributable to the company,” or is not attributable to Hero MotoCorp, said the company in the filing.

Hero MotoCorp is looking to take “appropriate steps” which includes filing an appeal for the same in the court, said the company in the statement. The GST tax demand notice caused no material impact on the financials, operations or other activities of the company, said Hero MotoCorp in the filing. 

Hero MotoCorp posted positive results for the April to June quarter, the company's net profits rose 36 per cent to ₹1,123 crore compared year-on-year with the previous year.