Mahindra & Mahindra Ltd. (M&M) is currently grappling with a penalty amounting to over Rs 14.3 lakh due to an erroneous claim of input tax credit during the transition from the excise system to the Goods and Services Tax (GST) framework. The lapse pertains to the formerly independent entity, Mahindra Vehicle Manufacturers Ltd., which has since been amalgamated into Mahindra & Mahindra Ltd.
In an official regulatory filing, the company acknowledged the penalty and indicated its confidence in receiving a favorable resolution at the appellate level based on its internal assessment, legal guidance, and the prevailing law.
According to the filing, “The company has received an order from the Joint Commissioner, CGST and Central Excise, Pune-I Commissionerate, imposing a penalty of Rs 14,31,571 under applicable provisions of the CGST Act, 2017 regarding erstwhile Mahindra Vehicle Manufacturers Ltd. (MVML).” The order stems from the authority’s determination that incorrect input tax credit (ITC) was claimed during the transition period from the excise regime to the GST structure. The regulatory body has consequently ordered the recovery of the misclaimed ITC along with associated interest.
Dated July 20, 2023, the order was officially communicated to Mahindra & Mahindra Ltd. on August 17, 2023. The company remains optimistic about a favorable outcome during the appeals process, grounded in their internal analysis and legal advice. Importantly, the company anticipates that the order will have minimal financial implications.
