Key Points
- The Joint Commissioner, CGST & Central Excise, Pune-I Commissionerate penalized Mahindra & Mahindra (M&M) INR 14.3 lakh (US$ 20,000) for incorrectly claiming input tax credit (ITC) during the transition from the excise regime to the GST regime.
- M&M was penalized INR 14.3 lakh (US$ 20,000) by the Joint Commissioner, CGST & Central Excise, Pune-I Commissionerate for incorrectly claiming ITC.
- The penalty amount of INR 14.3 lakh was calculated as 25% of the incorrect ITC claimed by M&M.
- M&M is hopeful of a favourable outcome at the appellate level and does not expect the order to have any significant financial impact.
- The penalty is a reminder to all taxpayers to be careful while claiming ITC under the GST law.
The Joint Commissioner, CGST & Central Excise, Pune-I Commissionerate imposed a penalty of INR 14.3 lakh (US$ 17,000) on Mahindra & Mahindra (M&M) for its erstwhile arm, Mahindra Vehicle Manufacturers Ltd (MVML), incorrectly claiming input tax credit (ITC) during the transition from the excise regime to the GST regime.
ITC
The order was issued on the basis that MVML had availed incorrect ITC during the transition period. M&M has said that it is “hopeful of a favourable outcome at the appellate level” and that it does not expect the order to have any significant financial impact.
The penalty amount of INR 14.3 lakh was calculated as follows:
- MVML incorrectly claimed an ITC of INR 14,31,571.
- The penalty percentage is 25%.
- The penalty amount is 25% of the incorrect ITC claimed, or INR 3,57,893.
The penalty for an incorrect ITC claim under the GST law is 25% of the amount of incorrect ITC claimed. The penalty is imposed to deter taxpayers from making incorrect ITC claims.
Penalty
In this case, MVML incorrectly claimed ITC on account of some technical errors. M&M has said that it has taken corrective measures to ensure that such errors do not occur in the future. The company is also exploring all legal options to challenge the penalty order.
The penalty imposed on M&M is a reminder to all taxpayers to be careful while claiming ITC under the GST law. Any incorrect ITC claim can attract a penalty of up to 25% of the amount of incorrect ITC claimed.
Conclusion
The Joint Commissioner, CGST & Central Excise, Pune-I Commissionerate penalized Mahindra & Mahindra (M&M) INR 14.3 lakh (US$ 20,000) for its erstwhile arm, Mahindra Vehicle Manufacturers Ltd (MVML), incorrectly claiming input tax credit (ITC) during the transition from the excise regime to the GST regime.
