Maruti Suzuki Pitches Tax Amnesty for Auto Industry Growth

Maruti Suzuki India’s Chief Financial Officer, Arnab Roy, has formally requested the central government to implement an amnesty scheme or an “as-is” settlement mechanism. This initiative aims to conclusively resolve historical indirect tax litigation that has burdened the automobile industry.

Speaking at the SIAM Automotive Tax Conference, Roy highlighted that such a scheme would enable the industry to clear legacy legal hurdles and unlock trapped capital. He emphasized a need for a “smarter way to address the past” as India moves towards “GST 2.0” reforms.

Understanding the Proposed Settlement Options

The proposed schemes offer distinct approaches to resolving old tax issues. An amnesty scheme typically involves taxpayers settling principal tax dues while the government waives associated interest and penalties.

Conversely, an “as-is” settlement would recognize past tax filings as final, effectively closing disputes without further adjustments. Both options seek to provide a clean slate for companies.

Key Tax Demands Faced by Maruti

• ₹173.9 crore demand from the Gujarat GST authority.
• ₹139.3 crore demand from the Haryana GST Commissioner.

These demands highlight the significant financial capital currently held up in ongoing disputes for companies like Maruti Suzuki and its subsidiary, Suzuki Motor Gujarat.

Broader Policy Reforms Advocated

Beyond the immediate tax dispute resolution, Roy also outlined several other critical policy adjustments for the government’s consideration. These changes are designed to enhance operational efficiency and reduce future complexities for businesses.

• A single-rate structure for customs duties.
• Seamless transfer of central input tax credit across different state GST registrations.
• Improved alignment between the Companies Act and existing tax laws to prevent new disputes.
• Clearer government guidance on eligible GST input tax credits and product classification.

Expediting Dispute Resolution Mechanisms

To further streamline the resolution process for ongoing and future disputes, Roy offered several structural suggestions. These proposals aim to reduce reliance on traditional court systems and foster more efficient dialogue.

• Expanding advance pricing agreements to cover transfer pricing, customs, and GST, including international trade partners.
• Establishing independent appellate review mechanisms.
• Creating regular industry-government forums outside of the courts.

Ultimately, these measures are intended to free up capital and allow the automobile industry to focus its resources on innovation and growth. Roy also advised tax professionals to adopt a digital-first approach and integrate tax strategies into long-term business planning.