Motherson International faces GST penalty over guarantee commission

Samvardhana Motherson International Limited (SMIL) has been levied a penalty of INR 38,82,240 by the Joint Commissioner (ST), GST Appeals, Chennai. The penalty, issued via an order dated November 4, 2025, relates to the non-payment of Goods & Service Tax (GST) on guarantee commission. This commission was disclosed in SMIL's consolidated financial statements for the fiscal year 2021-22, pertaining to corporate guarantees provided to its wholly-owned subsidiaries.

SMIL stated that it had already discharged the applicable GST under its Uttar Pradesh GST registration, as the place of issue for the corporate guarantee, in accordance with the GST Act, 2017. Consequently, the company argues that no further GST or penalty should be levied.

The company plans to file an appeal against the order in the Tribunal/Court within the statutory timeframe. SMIL has assessed that there will be no material impact on its financial, operational, or other activities as a result of this penalty.