Maruti Suzuki gets ₹5,800 crore tax order; dispute likely to head for litigation

Maruti Suzuki India Limited has received a draft assessment order of about ₹5,786 crore from the income tax department, adding to a growing list of large tax disputes involving major corporates.

The company said the order relates to past assessment years and is not a final demand, and that it will pursue remedies under the law.

What is the tax dispute about?

The draft order is part of an ongoing assessment by tax authorities and typically relates to issues such as transfer pricing, deductions or income classification.

While the company has not disclosed detailed grounds publicly, such large claims usually arise from differences in interpretation between companies and tax authorities on how income is reported.

Importantly, a draft assessment order is only the first stage of the dispute process. It does not translate into an immediate cash outflow.

Under India’s tax dispute framework:

• Companies can file objections before the Dispute Resolution Panel (DRP)

• Cases can then move to tribunals and courts

• This process can take several years, and final liabilities are often reduced or overturned.

As a result, such claims are typically treated as contingent liabilities, limiting their immediate impact on earnings or cash flows.

In March 2025, Maruti received a draft assessment order of ₹2,966 crore for FY2021–22, which was subsequently reduced to ₹1,182.5 crore in the final assessment issued in January 2026. The company is currently contesting that demand. Several large companies across sectors — particularly in manufacturing and automotive — are facing multi-billion-rupee tax claims.

The shares of Maruti Suzuki ended 1.98% higher at ₹13,010 apiece on the national stock exchange on Tuesday. The company's stock has surged nearly 13% during the past year, outperforming the benchmark Nifty 50 index that has risen just a little over 4% during the same period.