Hero MotoCorp Hit with ₹464.6 Crore Tax Demand; Vows to Challenge CGST Orders
Hero MotoCorp, India’s largest two-wheeler manufacturer, has landed in hot water with the tax authorities. The company announced on Tuesday (February 4, 2025) that it has received two tax demand orders from the Additional Commissioner of Central Goods and Services Tax (CGST), Alwar, Rajasthan.
Meenu Rapria 
The orders, issued on February 3, collectively amount to a whopping ₹464.6 crore in penalties.The dispute revolves around the tax rates applied to parts and accessories supplied by Hero MotoCorp between July 2017 and March 2024.
The first order alone slaps a hefty penalty of ₹456.06 crore under Section 74 of the CGST Act, along with an equivalent GST charge and applicable interest. Meanwhile, the second order imposes an ₹8.5-crore penalty related to after-sales parts supplied between July 2017 and March 2021, again accompanied by an equivalent GST amount and interest.
However, Hero MotoCorp isn’t backing down without a fight. In a regulatory filing, the company stated that, based on its own assessment, the tax demand is "not maintainable in law." It further confirmed that it will take appropriate legal measures, including filing appeals against both orders.
This tax controversy comes at a time when the Indian automobile industry is navigating multiple challenges, including fluctuating demand and evolving regulatory policies. Hero MotoCorp’s next steps in challenging these tax orders will be closely watched, as they could set a precedent for similar cases in the industry.
