Hero MotoCorp Ltd. has received a goods and service tax (GST) notice demanding ₹17.64 crore from the GST office of the Government of NCT Delhi. The notice, issued on August 17, 2024, relates to the disallowance of input tax credit for the financial year 2019-20, according to the company’s filing with the Bombay Stock Exchange (BSE) on Sunday, August 18.
After the notice, Hero MotoCorp’s shares closed 1.02% higher at ₹5,125.80, up from ₹5,074.05 in the previous trading session.
The demand notice requires Hero MotoCorp to pay ₹9.38 crore as the main tax under Section 73 of the Central Goods & Services Tax Act, 2017 (CGST Act), ₹7.32 crore as interest on that tax, and ₹93.86 lakh as penalty fees.
In its BSE filing, Hero MotoCorp stated that it believes the tax demand is not legally justified. The company claimed that the input tax credit, which has been disallowed by the GST authorities, was properly claimed according to GST laws. The disallowance happened because one of the suppliers did not comply with the rules, but this non-compliance is not the fault of Hero MotoCorp, the company said.
Hero MotoCorp plans to take appropriate legal action, including filing an appeal against the GST notice. The company also mentioned that this notice will not have a significant impact on its finances, operations, or other activities.
In related news, Hero MotoCorp reported a strong performance for the April to June quarter, with net profits rising by 36% to ₹1,123 crore compared to the same period last year.
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