Mahindra & Mahindra Ltd disclosed a penalty exceeding Rs 56 lakh, attributed to the erroneous carry-forward of input service distributor credit from the pre-GST era to the GST regime, concerning its two-wheeler business.
The penalty, imposed by the office of the Assistant Commissioner, Division-IV, CGST & Central Excise, Ahmedabad South, amounts to Rs 56,04,246. This pertains specifically to Mahindra Two Wheelers Ltd (MTWL), previously demerged and subsequently amalgamated with M&M, as stated in the regulatory filing by Mahindra & Mahindra.
Explaining the grounds for the penalty, the company highlighted, “The order has been passed on the basis that closing balance of Input Service Distributor (ISD) credit available in pre-GST regime was wrongly carried forward into GST regime.”
Expressing their intended course of action, the company affirmed, “Based on our assessment, an appeal will be filed, and we are hopeful of a favourable outcome at the appellate level. We do not reasonably expect the said order to have any material financial impact on the company.”
