Hero MotoCorp faces tax probe over links to vendor: Report

Tax authorities are investigating motorcycle maker Hero MotoCorp Ltd's relationship with a vendor suspected of reporting about Rs 90 crore in false expenditure, said a report on Wednesday.

Based on the alleged fake spending by vendor Salt Experiences, Hero MotoCorp received a tax credit, leading to suspected tax evasion of about Rs 16 crore, Reuters reported quoting sources.

A spokesperson for Hero MotoCorp said "there is no ongoing investigation against" the company on the matter, but did not elaborate further, the report said.

The probe is being conducted by the Directorate General of Goods and Services Tax Intelligence (DGGI), sources told Reuters.

The investigation comes after Enforcement Directorate (ED), in a separate case, last week conducted searches at 12 premises owned by Hero MotoCorp and its founding shareholder Pawan Kant Munjal, seizing $3 million in assets.

Salt Experiences had paid Rs 12 crore to the DGGI related to the alleged tax evasion, and the investigation was ongoing, the report said quoting sources.

The probe by the DGGI is being monitored by other agencies, such as the ED and Ministry of Corporate Affairs (MCA), sources told Reuters.

MCA is also investigating Hero MotoCorp's relationship with Salt Experiences in a case related to alleged diversion of funds, Reuters reported in June quoting sources, adding it was looking into whether the motorcycle maker controls Salt Experiences.

Hero MotoCorp said at the time that it had received no communication from the government and could not comment.
 

With inputs from Reuters