Hero MotoCorp Faces ₹456 Crore GST Demand
The latest business news today centers around Hero MotoCorp Ltd., a major player in the Indian two-wheeler [[market]]. Rajasthan authorities have issued a significant Goods and Services Tax (GST) demand of ₹456.06 crore against the company. This substantial demand follows a tax dispute concerning the tax rates applied to parts and accessories supplied between July 2017 and March 2024. The Additional Commissioner, Central Goods and Services Tax, Alwar, Rajasthan, issued the order.
Details of the GST Dispute
The demand isn’t limited to one instance. On February 3rd, 2024, Hero MotoCorp received another order imposing an additional penalty of ₹8.5 crore, again related to disputed tax rates on after-sales parts supplied between July 2017 and March 2021. Both orders include penalties, GST, and applicable interest. The company maintains that the tax demand is legally unjustifiable and plans to appeal both orders. This is [[breaking news]] that will significantly impact the business and investment analysis for the company.
Impact and Company Response
Hero MotoCorp has affirmed that these orders won’t materially impact its financial standing, operations, or other activities. The company is fully committed to resolving this matter and has reassured investors about its business outlook. The company’s CEO, Niranjan Gupta, recently stepped down after a two-year tenure, which is unrelated to this tax dispute. This is also [[latest news]] impacting the company’s leadership.
Market Reaction and Analyst Outlook
The news sent ripples through the [[market]]. Hero MotoCorp shares closed 1.16% lower at ₹4,237.10, underperforming the benchmark NSE Nifty 50, which saw a 1.62% increase. Over the past 12 months, the stock has seen a 10.18% decline. However, the sentiment among analysts remains largely positive. Bloomberg data shows that 28 out of 43 analysts tracking the company have a ‘buy’ rating, suggesting confidence in the company’s long-term prospects. The average 12-month price target implies a potential upside of 20.4%.
Looking Ahead
This significant GST demand presents a challenge for Hero MotoCorp. The company’s planned appeals indicate its intention to vigorously defend its position and overcome the legal hurdles. The coming weeks will be crucial as the company navigates these legal proceedings, and investors will be closely monitoring the situation. This ongoing business news is developing quickly and provides an important analysis of the financial markets in India. This is certainly big business news today!