Winning Bizness Desk

Mumbai. The country's leading IT company Infosys received a GST notice of Rs 32,000 crore last month, which was later withdrawn. But now a new case has come to light of Bajaj Finance, which has also received a notice. However, this notice is not related to GST. According to reports, Bajaj Finance has received a show-cause notice of Rs 341 crore from the Directorate General of Goods and Services Tax Intelligence (DGGI). This notice was issued on August 3, in which Bajaj Finance has been accused of tax evasion by wrongly showing service charges as interest charges. The 160-page notice states that Bajaj Finance Limited has committed GST evasion by wrongly classifying service and processing charges as interest to avail the exemption given under the Central Tax Rules.

The report states that a total fine of Rs 850 crore has been imposed on the financial services company. This includes alleged tax evasion of Rs 341 crore, interest of Rs 150 crore and interest of Rs 16 crore per day 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 'advance interest' from those who take loans to buy store items. DGGI has described it as taxable 'processing fee or service fee'. However, Bajaj Finance has classified it as non-taxable 'interest fee', which has been questioned by the authority.

This notice has not affected the company's stock. Bajaj Finance's stock is trading at Rs 6,595 without any decline. However, no significant jump has been seen in it either. It is worth noting that when Infosys received the notice, its stock was affected. Later when the notice was withdrawn, Infosys' stock saw a jump. Earlier, it was trading 1.6 per cent higher but after no relief was forthcoming from the government, the stock took a beating and fell by 0.3 per cent.