I-T Dept serves ₹2,159 cr draft assessment order to Maruti Suzuki

Maruti Suzuki India Ltd on Tuesday received a ₹2,159 crore draft assessment order for the financial year 2019-20 from the Income Tax Department.

The company has received a draft assessment order for FY19-20 wherein certain additions and disallowances amounting to ₹2,159 crore with respect to returned income (the income disclosed by the company in its Income Tax return) have been proposed, India's largest carmaker says in a stock exchange filing.

Maruti Suzuki says it will file its objections before the Dispute Resolution Panel. "There is no impact on financial, operation or other activities of the Company due to this draft Assessment Order," the automaker says.

Maruti Suzuki's production volumes in September dipped 1% to 174,978 units as against 177,468 units in the same month last year. The company produced 173,451 passenger vehicles last month compared with 173,929 units in September 2022.

Shares of Maruti Suzuki fell nearly 3% to ₹10,307 apiece on the BSE. India's largest carmaker sold a total of 181,343 units in September 2023, up 2.8% year-on-year as against 176,306 units in the same month last year. Total sales in the month include domestic sales of 153,106 units, sales to other OEM of 5,726 units and exports of 22,511 units. The company's total domestic passenger vehicle sales rose to 150,812 units last month from 148,380 units in the year-ago period.

In August, Maruti Suzuki said it would acquire a 100% stake in Suzuki Motor Gujarat from its parent Suzuki Motor Corporation. The company's board evaluated the two options for acquiring the SMC equity in SMG: payment in cash and the issue of MSIL equity shares on a preferential allotment basis. The impact of both options on the profitability of Maruti Suzuki, the earnings per share and the dividend payment to shareholders was considered for each year up to 2031. The board concluded that the option of acquiring SMG shares by issuing Maruti Suzuki equity shares to SMC would be beneficial to minority shareholders and to MSIL.

Following the acquisition, Japanese-owned Suzuki Motor Corporation's stake in MSIL is expected to increase from 56.48% currently to 58.28%.

The carmaker will produce electric vehicles at its Gujarat plant, which is close to SMC's battery unit in the western state. "EV production will now be done by MSIL and not by SMG. Our people will get involved in electric vehicle production. In the long term, they will acquire much more knowledge and expertise in this area than they would have done otherwise," MSIL chairman RC Bhargava said in August.

India's biggest carmaker has earlier approved the termination of the contract manufacturing agreement with Suzuki Motor Corporation to bring efficiency to production and supply chain.