Hero MotoCorp Ltd. has been slapped with a GST demand of Rs 456 crore by the Rajasthan authorities, in connection to a tax dispute case.
The company has received an order from the Additional Commissioner, Central Goods and Services Tax, Alwar, Rajasthan "imposing a penalty of Rs 456.06 crore under Section 74 of the Central Goods and Service Tax Act, 2017 along with an equivalent amount of GST and applicable interest thereon" by disputing the tax rates on the parts and accessories supplied during the period of July 2017 to March 2024, the two-wheeler manufacturer said in a regulatory filing on Tuesday.
The GST demand notice was issued to the company on Feb. 3. On the same date, it received another order from the same GST authority. The order imposed a penalty of Rs 8.5 crore on Hero MotoCorp, along with an "equivalent amount of GST and applicable interest" by disputing the tax rates on the parts supplied by the company for after-sales during the period from July 2017 to March 2021, as per the exchange filing.
Hero MotoCorp said it would be filing appeals against both the orders. "Based on the company's assessment, the tax demand is not maintainable in law under both the orders. Accordingly, the company shall take appropriate steps including filing of appeals."
There is no material impact on financials, operations or other activities of the company due to the order, it added.
Shares of Hero MotoCorp closed 1.16% lower to Rs 4,237.10 apiece, compared to 1.62% advance at the benchmark NSE Nifty 50. It has fallen 10.18% in the last 12 months.
Twenty-eight out of the 43 analysts tracking the company have a 'buy' rating on the stock, nine recommend a 'hold' and six suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 20.4%.
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