The country’s leading two-wheeler maker, Hero MotoCorp Ltd, has come under the radar of tax authorities as the Income Tax Department issued notices for a total of INR 605 Cr including interest for six assessment years.
Notice from Income Tax Department
In a Stock Exchange Filing, Hero MotoCorp revealed that it has received assessment orders and demand notices dated 30th March 2024 for six assessment years spanning from FY14 to FY18 and FY20. The notice, issued under Sections 147 and 143(3) of the Income Tax Act, 1961, cited certain disallowances resulting in a tax demand of INR 308.65 Cr and interest of INR 296.22 Cr.
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Hero MotoCorp responded with a plan to challenge the order as soon as it was made known. The company intends to file appeals with superior courts in the records’ quarters and applications for rectification, asserting its view that the tax demand is against sustainability.
Unlikely Impact on Financials
The alliance between the company’s management team and investors is showing its readiness to meet this demand without any major complications in other areas such as subordinate companies. Through assessment, the company is currently browsing the assessment orders and demand notices received, prepared to take necessary steps for rectification by filing appeals and if required.
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Steady Sales Growth Reported
This development comes after Hero MotoCorp reported a 5.5% growth in total sales for the financial year 2023-24 compared to the previous year. The company sold 56,21,455 units during the year, with motorcycle sales reaching 51,90,672 units and scooter sales reaching 430,783 units. Domestic sales increased to 54,20,532 units, while exports increased to 2,00,923 units
