The Directorate General of GST Intelligence (DGGSTI), intelligence arm of the indirect tax department, has issued notices to multiple ancillary manufacturers of leading auto majors, seeking information on arrangements regarding the design, drawing charges and specifications of components that are shared with vendors. Tax officials believe vendors are evading tax as value of some of these elements was not being included by the component manufacturers while calculating the excise duty.
Automobile manufacturers generally provide the design, drawing and specifications of the moulds to be developed for making these components in a soft form. Excise duty was discharged on the value of components including cost of moulds. However, value of some of the charges mentioned above was typically not included by the component manufacturers while calculating the excise duty.
Read More at: https://economictimes.indiatimes.com/industry/auto/auto-news/directorate-general-of-gst-intelligence-issues-notices-to-auto-ancillaries-over-tax-evasion/articleshow/69405036.cms?from=mdr