VAT dampener in record Bajaj Auto profit jump story
July, 15th 2011
Company says govt not refunding Rs 1,100 crore; govt officials claim firm should pay penalty instead
Conducting business in the state was becoming more of a bad experience, according to Bajaj Auto MD Rajiv Bajaj, who cited the reason as the company not getting its value added tax (VAT) refund claims for the last five quarters, the amount having piled up to Rs 1,100 crore. He said the company may contemplate expansion out of the state for its four-wheeler project.
Bajaj said this after the Annual General Meeting of the company, where a record jump in sale of two-wheelers returning a net profit of Rs 711 crore for the first quarter of the current fiscal was announced.
Government officials, on the other hand, claim that Bajaj Auto should pay a penalty rather than get a refund. They claim Bajaj Auto has to pay a penalty for 2008-09 and 2009-10 for claims that didnt match with assessments carried out by sales tax officials.
Commissioner, sales tax, Sanjay Bhatia, said the companys claims did not match with the government assessment. He said besides dues of Rs 146 crore for 2008-09 and Rs 262 crore for 2009-10 an equivalent amount has to be paid by the company as penalty.
Ravi Kumar, senior vice-president, business development, Bajaj Auto, said, We have paid 12.5 per cent VAT to the government at the time of purchase of input material for our production facilities through vendors. But we were to get refunds against sales tax payment which we made, which is also 12.5 per cent on sale of units from our Aurangabad and Chakan plants. This has not been given to us.