Hyundai Motor India announced on 22nd July, 2025 that it has received a demand notice from tax authorities amounting to Rs. 5.17 billion (US$ 62.1 million), comprising both tax and penalty, for the alleged short payment of Goods and Services Tax (GST) compensation cess on certain SUV models.

According to the company's exchange filing, "The company has received an order from the Commissioner (Appeals), CGST Department, Tamil Nadu, confirming a GST Compensation Cess demand of Rs. 2.58 billion along with a penalty of Rs. 2.58 billion, based on the allegation of short payment of GST Compensation Cess on certain SUV models for the period from September 2017 to March 2020."

Hyundai stated that the order has no impact on the company's financial, operational, or other activities. The company is currently reviewing the order and intends to exercise its right to file an appeal.

The GST compensation cess on vehicles is an additional levy imposed on specific categories of vehicles, in addition to the standard GST rate of 28%.

Introduced in 2017, the compensation cess is intended to generate funds for compensating states for any revenue shortfalls resulting from the transition to the GST regime.