Maruti Suzuki, India's biggest carmaker by sales has been asked to pay an extra excise duty of Rs. 150 crore by the tax tribunal. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) gave the organization time extending till the December of 2014 to pay off the sum, if coming up short with this amount, Maruti Suzuki may need to face the conceivable toll of interest and penalty that could take the aggregate to an upgrade of Rs. 800 crore.
Maruti Suzuki, however, still has the right to question this ruling before the Delhi High Court. This long running case began when the CESTAT discovered Maruti Suzuki blameworthy of producing cars at a higher cost than it was asserting in its excise returns to the government. As indicated by the tribunal, Maruti dealers run special promotional plans and schemes including offering of discounts especially around the festivals. These plans or limited offers are then balanced by the organization from the dealers through the margins offered on the cars to them.
Maruti Suzuki expressed in its defense that it had nothing to do with the limited time plans/schemes and discounts which are termed as 'post removal expenses' and are controlled by dealers at their own expense. The automaker states to have sold these cars at industrial rates to the dealers. Not believing Maruti's clarification, the tax tribunal expressed that since the dealers and organization enter into a written contract under which the dealers can lead the promotional plans and offers to amplify their sales, these are taxable as a major aspect of the costs of cars are sold by the company.
