The country’s leading IT company Infosys received a GST notice last month, which was of Rs 32,000 crore. Although it was later withdrawn, but now a new case of Bazaar Finance has come to light. It has also received a notice. However, this notice is not related to GST.
According to an Economic Times report, Bajaj Finance has received a show-cause notice of Rs 341 crore from the Directorate General of Goods and Services Tax Intelligence (DGGI), accusing it of tax evasion by wrongly mentioning service charges as interest charges in a notice issued on August 3.
Information found in this report
Citing the 160-page notice, the report said intelligence inputs revealed that Bajaj Finance Ltd was evading GST by wrongly treating service and processing charges as interest to avail exemptions provided under central tax rules.
The report said that a total fine of about Rs 850 crore has been imposed on the financial services company. The penalty includes 100 per cent penalty for the alleged tax evasion of Rs 341 crore, interest of Rs 150 crore and daily interest of Rs 16 crore till the payment is completed. This figure is from June 2022 to March 2024.
What is the matter?
According to the report, the company charges ‘upfront interest’ from loan borrowers for purchasing store items, which DGGI has termed as taxable ‘processing fee or service charge’. However, Bajaj Finance has classified it as non-taxable ‘interest charge’, which has been questioned by the authority.
There was no impact on the stock
However, this has not affected the stock. The company’s stock is trading at 6,595 without any decline. It should also be noted that no significant increase has been seen in it. Let us tell you that when Infosys received the notice, its stock was affected. Then after the notice was withdrawn, Infosys’ stock saw a jump. It was earlier moving up by 1.6 percent, but after the news of not getting relief from the government on this issue, the stock registered a decline. It fell from the rise to about 0.3 percent.
