Maruti Suzuki gets notice from customs, DRI for allegedly evading duty over ‘dubious’ hybrid tech

LUCKNOW: Directorate of revenue intelligence (DRI) and customs authorities have served a show-cause notice to Maruti Suzuki India (MSIL) for allegedly evading around Rs 71-crore duty over ‘dubious’ hybrid technology used in Ciaz, Ertiga and S-cross.

According to customs sources, following the DRI Lucknow investigation, on Wednesday, MSIL was served a 105-page notice for Rs 71 crore. Another notice in the same matter is being considered, with the scale of the alleged duty evasion estimated at another Rs 70 crore.

Responding to TOI queries, MSIL spokesperson said, “The matter is under dispute. At this stage, we have no comments to offer. MSIL will pursue all legal remedies available to it.”


The matter came to light in 2019, when the DRI Lucknow started an investigation after it was alerted that Maruti Suzuki was utilising motor generator unit (MGU) or alternator for its ‘Smart Hybrid Vehicle From Suzuki’ (SHVS) technology engines. The agencies have alleged that this is not a complete hybrid technology.

In 2017, the government had provided incentives through customs duty exemption for technology used in manufacturing hybrid technology cars, which tax authorities said uses a combination of battery-powered electric motor and an internal combustion engine (ICE) to power the vehicle to drive and does not include such micro-hybrid motor vehicle with ‘start and stop’ technology, using battery powered electric motor only, while in static condition.

Maruti is accused of importing a simple car alternator or MGU and, with the use of software, tweaking and declaring it as goods for hybrid motor vehicles for customs clearance. Later, the company allegedly called the same equipment as SHVS or smart hybrid to fool their customers.

The SHVS has basically three functions, including auto start stop, regenerative braking and torque assist, but a complete hybrid car uses a combination of electric motor and gasoline in sync which further helps in fuel saving, said a DRI source.