Mahindra & Mahindra’s two-wheeler arm receives Rs 4 crore tax notice from MP

Mahindra Two Wheelers Limited, the two-wheeler business of Mahindra & Mahindra has received a penalty imposition of over Rs 4 crore from the Madhya Pradesh State Tax Department, the company said Friday.

As part of the Central Goods Services Tax Act of 2017, MTWL has been slapped with Rs 4,11,50,120 on grounds of invoices basis which Input Tax Credit (ITC) has been claimed by MTWL but not reported by vendors in GST returns - and thus are not appearing in auto-populated GSTR-2A, the company informed in a regulatory filing.

The GSTR-2A is a purchase-related tax return that is automatically generated for each business by the GSTN portal.

The notice, received on December 28 around 3 pm, also imposes the tax on grounds of carrying forward of education cess credit balance not allowed from the pre-GST regime to the GST regime.

The company plans to counter the decision, saying it does not expect a “material financial impact” from the development.

“Based on the Company’s assessment, an appeal will be filed and the Company is hopeful of a favourable outcome at the appellate level and does not reasonably expect the said Order to have any material financial impact on the Company,” the filing quoted Mahindra & Mahindra’s official stance.

Notably, the two-wheeler business of Mahindra Two Wheelers Limited (‘MTWL’) was demerged from MTWL and has since been merged with Mahindra & Mahindra.