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Show-cause notice to Maruti Suzuki for allegedly evading around Rs 71-crore duty!

As per the article from Economic Times, the Directorate of Revenue Intelligence (DRI) and customs authorities have served a show-cause notice to Maruti Suzuki for allegedly evading around Rs 71-crore duty over ‘dubious’ hybrid technology used in Ciaz, Ertiga and S-cross.

Another notice that is also being considered, alleges duty evasion amounting to an additional Rs.70 crore. Sanjeev Handa, Head of Corporate Affairs and Communications at Maruti Suzuki stated that the matter is yet under dispute and the company would be seeking legal recourse. “The matter is under dispute. At this stage, we have no comments to offer. MSIL will pursue all legal remedies available to it.”

In 2019, the issue caught attention when the DRI Lucknow started an investigation after it was alerted that Maruti Suzuki was utilizing a motor-generator unit (MGU) or alternator for its ‘Smart Hybrid Vehicle From Suzuki’ (SHVS) technology engines. The agencies have alleged that this is not a complete hybrid technology.

Maruti Suzuki is accused of importing a simple car alternator or Motor Generator Unit and, with the use of software, tweaking and declaring it as goods for hybrid motor vehicles for customs clearance. Do note that the government had offered incentives via customs duty exception for technology being used in making hybrid technology cars.

The company allegedly called the MGU equipment as SHVS or smart hybrid to miscommunicate the technology to their customers. The SHVS had basically three functions, including auto start-stop, regenerative braking, and torque assist, but a complete hybrid car uses a combination of electric motor and gasoline in sync which further helps in fuel saving, said the DRI source to TOI.


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