Bajaj Auto Hit with ₹10 Crore GST Penalty, Plans Legal Challenge

Bajaj Auto Limited has been slapped with a penalty and interest totaling over ₹10 crore by tax authorities, following a dispute over the classification of its instrument cluster components under the Goods and Services Tax (GST) regime.

 

Key Highlights:

 

Nature of Penalty: The Central GST, Pune-II Commissionerate, ruled that Bajaj Auto misclassified its instrument cluster under HSN code 9029 instead of 8708/8714 for the period July 2017 to March 2022. This resulted in a demand for differential GST of ₹10,03,91,402, which has been adjusted against taxes already paid by the company. The order also imposed an equivalent penalty and interest, plus a general penalty of ₹25,000, bringing the total to ₹10,04,16,402.

 

Company Response: Bajaj Auto strongly disagrees with the ruling, calling it beyond the tax authority’s jurisdiction and highlighting that it disregards a writ petition already pending before the Bombay High Court. The company asserts it has a robust legal case and intends to challenge the order.

 

Financial Impact: Bajaj Auto emphasized that the penalty will not have any major financial implications on its operations and reassured stakeholders of its financial stability.

 

Industry Context: The penalty comes as Bajaj Auto continues to report strong sales and profit growth, recently achieving an 8% year-on-year increase in consolidated net profit for Q3 FY25.

 

Bajaj Auto’s legal team is preparing to contest the order, and the industry will be watching closely for the outcome of this high-profile tax dispute.

 

Sources: Economic Times, Business Standard, Hindustan Times Auto, Legal Era