Audit Alarm: Bajaj Consumer Care’s ₹57 Million Tax and Penalty Saga Unfolds

Image Source: The Economic Times

Bajaj Consumer Care Ltd. has received a series of tax demand and penalty orders totaling ₹29 million in tax and ₹28 million in penalties from GST authorities across several states, intensifying regulatory scrutiny on the company’s tax credit claims.

Key Highlights:

Multiple Orders Across India: The company received three separate orders from GST authorities in Assam and Rajasthan, with tax demands and penalties ranging from ₹1.17 million to ₹3.06 million for each location. The primary issue cited was the disallowance of GST credit received from ISD (Input Service Distributor) registration.
Central GST Action: An additional order from the Assistant Commissioner, Central Goods and Service, Parwanoo (Himachal Pradesh), demanded ₹8.7 million in tax and ₹0.87 million in penalty, related to the disallowance of GST credit claimed in the previous fiscal year.
Recent Bihar Order: On August 27, 2024, the Deputy Commissioner of State Tax, Patna (Bihar), issued a demand for ₹0.99 million in tax and ₹0.15 million in penalty, again linked to GST credit disallowance from earlier fiscal years.
Nature of Disputes: All orders are based on the authorities’ contention that Bajaj Consumer Care inappropriately claimed GST credits in prior years, which were subsequently disallowed.
Company’s Response: Bajaj Consumer Care has stated that these orders will not materially impact its operations or financial activities and that it is in the process of appealing these orders at higher appellate forums.
No Business Disruption: Despite the cumulative tax and penalty demands, the company has reassured stakeholders that its business operations remain unaffected.