The indirect tax investigating agency allegedly found ABB India Ltd. evading goods and services tax by wrongly classifying equipment, according to a person aware of the development. The Directorate of Goods and Services Tax Intelligence’s probe revealed that the company allegedly misclassified turbochargers—used to boost engine efficiency—supplied to the Indian Railways, the person said on the condition of anonymity as the information isn’t public. That helped the maker of equipment for power and heavy industries lower GST on it to 5 percent from the applicable 28%.
The directorate allegedly found that ABB India evaded Rs 7.53 crore in tax from July 1, 2017 to Dec. 31, 2018. The company paid Rs 1.94 crore at 5% GST; and it will have to pay the remaining Rs 5.58 crore in tax.