Maruti Suzuki appears to have landed itself in hot waters over Hybrid technology the brand has been using on vehicles such as the Maruti Suzuki Ciaz, S-Cross and Ertiga. According to a media report, the Department of Revenue Intelligence (DRI) is issuing a show-cause notice for allegedly evading INR 71 crore of duty pertaining to Hybrid technology used in their vehicles.
Sources suggest that Maruti Suzuki India Limited (MSIL) has been served a 105-page show-cause notice by the DRI in Lucknow for utilising a Motor Generator Unit (MGU) in their SHVS (Smart Hybrid Vehicle from Suzuki) vehicles. Agencies claim that the technology is not a complete Hybrid technology but a micro-hybrid vehicle with ‘start/stop’ technology. Sources suggest that MSIL is importing a car alternator (MGU) and by use of software declaring it as a Hybrid motor for clearing customs. The Government of India provides incentives on custom duties for technology used in manufacturing hybrid electric vehicles. But the electric motor should be able to use battery power to propel the vehicle at low speeds or work in sync with the Internal Combustion Engine (ICE).
Maruti Suzuki’s SHVS
The Smart Hybrid Vehicle from Suzuki provides torque assist to the internal combustion engine, power to the electric starter during auto start/stop and has regenerative braking. But the system cannot use the Hybrid system to solely power the vehicle or power the vehicle in combination with the ICE motor. A complete hybrid vehicle can use the electric motor to power the vehicle at low speed and also assist the ICE motor further reducing the carbon emissions.
Allegations are that Maruti Suzuki India Limited is fooling their customers by importing a simple MGU and branding it as hybrid technology while declaring the goods as hybrid technology during custom clearance. The duty exemption only includes a battery-powered electric motor and an internal combustion engine to drive the vehicle and not a micro-hybrid. The authorities are also considering serving a second notice for another tax evasion matter amounting to INR 70 crores.