Hero MotoCorp Disputes ₹456 Crore GST Penalty, Plans Appeal

Hero MotoCorp

Hero MotoCorp, India’s leading two-wheeler manufacturer, has found itself under scrutiny from tax authorities. Following a similar situation with Volkswagen, Hero has received a substantial GST penalty notice from the Rajasthan GST council, totaling ₹456 crore.

In a regulatory filing, Hero MotoCorp disclosed that the Additional Commissioner of Central GST in Alwar, Rajasthan, issued the order. The penalty, levied under Section 74 of the Central Goods and Service Tax Act, 2017, disputes the tax rates applied to parts and accessories supplied by the company between July 2017 and March 2024. The notice also demands an equivalent amount in GST, along with applicable interest.

Furthermore, Hero MotoCorp received a separate notice from the Rajasthan GST council, imposing an ₹8.5 crore penalty. This notice also challenges the tax rates on after-sales parts supplied by the company from July 2017 to March 2021.

Hero MotoCorp, however, maintains that these penalties are unjustified. Based on their internal reviews, the company believes the “tax demand is not maintainable in law under both the orders.” They plan to appeal the decisions within the allotted timeframe. The company asserts that these notices will not significantly impact its financials, operations, or other activities.

On Tuesday, Hero MotoCorp’s shares closed down 1.14% at ₹4,237.25 on the BSE. Despite this tax issue, Hero MotoCorp has been actively launching new products. At the Bharat Mobility Global Expo 2025, they unveiled four new two-wheelers: the Xoom 125, Xoom 160, Xpulse 210, and Xtreme 250R. Just prior to the expo, they also launched an updated version of their Destini 125 scooter.


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