Maruti Suzuki Receives Show Cause Notice from GST Authority on Tax Liability

Maruti Suzuki India Ltd has received a show cause notice from the GST authority for the period of July 2017 to August 2022, the company said in a regulatory filing on Friday evening. The notice pertains to the matter of tax liability under reverse charge basis on certain services.

The reverse charge basis is a tax collection mechanism under which the recipient of a service is liable to pay GST to the government, instead of the supplier of the service. This mechanism is used for certain services, such as construction services, where the supplier of the service may not be registered under GST.

Maruti Suzuki said that it is currently reviewing the show cause notice and will file a reply to the GST authority. The company also said that the notice does not have any impact on its financial, operational, or other activities.

It is unclear why the GST authority has issued a show cause notice to Maruti Suzuki. However, it is possible that the authority is investigating whether Maruti Suzuki correctly paid GST on certain services during the relevant period.

If Maruti Suzuki is found to have underpaid GST, it could face penalties and interest charges. However, it is also possible that the company will be able to resolve the matter with the GST authority without having to pay any penalties or interest.

It will be interesting to see how this matter develops. Maruti Suzuki is one of India's largest automakers, and any tax liability issues could have a significant impact on thecompany.

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