Mahindra & Mahindra is fined Rs 56 lakh in taxes; the company will contest

On Thursday, Mahindra & Mahindra Ltd. said that it had been fined more than Rs. 56 lakh for improperly transferring input service distributor credit from the pre-GST period into the GST system in relation to its two-wheeler business.

Mahindra & Mahindra stated in a regulatory filing that they had received an order from the Office of the Assistant Commissioner, Division-IV, CGST & Central Excise, Ahmedabad South, imposing a penalty under section 74 of the CGST Act, 2017 amounting to Rs 56,04,246 in relation to the two-wheeler business of Mahindra Two Wheelers Limited (MTWL), which was merged with the company after MTWL was dissolved.

The ruling further said that the closing balance of the Input Service Distributor (ISD) credit that was available prior to the GST regime was incorrectly carried over into the GST regime.

The business said that it 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” and that it would submit an appeal based on its assessment.