Bajaj Hit with ₹34.74 Crore Tax Demand for Spare Parts Classification Issue

Bajaj Auto states the tax demand is not valid and intends to seek legal relief through the appeals process.

On Tuesday, Bajaj Auto announced that it had received a tax demand of Rs 34.74 crore due to the alleged misclassification of replacement components it supplied.

The ruling issued by the office of Deputy Commissioner, Rudrapur, Uttarakhand, also issued a penalty amounting to Rs 3.47 crore, the Pune-based firm specified in a regulatory filing.

According to tax officials, because the company creates automobiles, the spare parts, which are customized products solely used in the creation of vehicles would be categorized as auto parts, disregarding the principle of general rules of interpretation, the company stated.

Bajaj Auto considers it has a strong case on merit because it has correctly classified parts and accessories for more than three decades, adhering to the General Rules of Interpretation, relevant section notes, chapter notes and HSN Explanatory notes, which are supported by multiple judicial precedents.

According to the Bajaj it believes the tax demand is not legally valid. The decision is appealable, and the company aims to seek appropriate legal remedies under the law. Also, the company's stock was down 0.46 percent at Rs 9,051 per share on the BSE.