Mahindra & Mahindra has been fined with Rs 4,11,50,120 for issues related to input tax credit claim and education cess credit balance carry forward from the pre-GST regime to the GST regime for its two-wheeler business. The penalty includes non-reporting of invoices by vendors in GST returns and the disallowance of carrying forward Education Cess credit balance.
In a regulatory filing, Mahindra & Mahindra said it has received an order from the office of the Deputy Commissioner, State Tax, Audit Wing, Indore-01, Madhya Pradesh imposing a penalty amounting to Rs 4,11,50,120 to the two-wheeler business of Mahindra Two Wheelers Ltd (MTWL), which was demerged from MTWL and has since been merged with the company.
One of the reasons for imposing the penalty is that the “invoices basis which Input Tax Credit (ITC) has been claimed by MTWL are not reported by vendors in GST returns and thus are not appearing in auto populated GSTR-2A”.
Also, another reason is that the “carry forward of Education Cess credit balance (is) not allowed from pre-GST regime to GST regime”.
Based on its assessment, M&M said “an appeal will be filed and the company is hopeful of a favorable outcome at the appellate level and does not reasonably expect the said order to have any material financial impact on the company”.
On Thursday, the company said it received an order from the office of the Assistant Commissioner, Division-IV, CGST & Central Excise, Ahmedabad South imposing a penalty amounting to Rs 56,04,246 in relation to the two-wheeler business of MTWL (Mahindra Two Wheelers).
