Maruti Suzuki faces DRI Inquiry over incorrect HSN code for imported component

Maruti Suzuki India, the country's largest car manufacturer, is under scrutiny as the Directorate of Revenue Intelligence (DRI) has reportedly initiated an inquiry against the company for allegedly using an incorrect Harmonized System of Nomenclature (HSN) code for an imported component. News agency PTI reports that the inquiry, initiated by the DRI's Hyderabad Zonal Unit and communicated to Maruti Suzuki on February 20, 2024, concerns the import of a component known as 'Shaft Assy Propeller' under an incorrect HSN code, as per the explanatory notes of the World Customs Organization (WCO).

Additionally, Maruti Suzuki is said to have paid Integrated Goods and Services Tax (IGST) on certain automobile parts at a rate of 18 per cent, while the correct rate is 28 per cent.

In response to the inquiry, Maruti Suzuki India stated that it will file a suitable reply to the DRI and emphasised that there is no significant impact on its financial, operational, or other activities due to this inquiry.

This is not the first time Maruti Suzuki has faced scrutiny from customs authorities. In October 2023, the company received a showcause notice from the customs department for allegedly evading customs duty amounting to ₹16,27,085. The customs department alleged that Maruti Suzuki had wrongly availed of the Basic Customs Duty (BCD) concession based on the end use of imported goods.

Maruti Suzuki imports goods from foreign suppliers and has claimed BCD concession under various categories of Notification No. 50/2017-Customs.

The inquiry by the DRI raises questions about the company's import practices and compliance with customs regulations. As one of India's leading automobile manufacturers, Maruti Suzuki's handling of this inquiry and its compliance with customs regulations will be closely watched by industry stakeholders and regulatory authorities alike.

(With agency inputs)