Bajaj Auto gets ₹34.74 crore tax demand over spare parts classification

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Bajaj Auto on Tuesday said it has received a tax demand of ₹34.74 crore on account of the alleged misclassification of spare parts supplied by it.

The order issued by the office of Deputy Commissioner, Rudrapur, Uttarakhand, also imposed a penalty amounting to ₹3.47 crore, the Pune-based firm said in a regulatory filing.

According to tax authorities, the company, being a manufacturer of automobiles, the spare parts being a customised product, only used in the manufacturing of vehicles, would get classified as auto parts, disregarding the principle of general rules of interpretation, the company said.

Bajaj Auto believes that it has a very strong case on merit as it has been rightly classifying the parts and accessories for more than three decades, following the General Rules of Interpretation, relevant section notes, chapter notes and HSN Explanatory notes, which are supported by various judicial precedents.

Therefore, the company stated that it believes the tax demand is not maintainable in law.

The said order is an appealable order, and the company will take appropriate legal remedies as per law, it stated.

The company's shares were trading 0.46 per cent down at ₹9,051 apiece on the BSE.