Mahindra & Mahindra Ltd announced on Friday that the Central Goods and Service Tax (CGST) Pune Commissionerate had slapped a penalty of approximately Rs 14.3 lakh for availing of incorrect input tax credit.

In the exchange filing, the company said it had received an order dated July 20, 2023, from the Joint Commissioner, CGST & Central Excise, Pune-I Commissionerate imposing a penalty of Rs 14,31,571 under applicable provisions of the CGST Act, 2017. 

The company has been penalised for the recovery, along with interest, of the incorrect input tax credit that was availed during the transition from the excise regime to the GST regime by Mahindra Vehicle Manufacturers Limited (MVML). 

MVML has since merged into Mahindra and Mahindra Ltd. The company received the order at 2:30 pm on August 17. 

The company has assessed that based on the prevailing law and the advice of its counsel, there is hope of a favourable outcome at the appellate level. The company does not expect the said order to have any material financial impact. 

Shares of the company saw a fall in their prices after the order was announced. The stock reached an intraday low of Rs 1,546, nearly 2% down from the previous closing price. At 03:05 pm, the scrip traded at Rs 1,554.80, 1.12% lower.