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Deferred Tax Assets / Liability
Deferred Tax Assets / Liability
Contingent liabilities
Contingent liability is a potential liability that may occur, depending on the outcome of an
uncertain future event. A contingent liability is recorded in the accounting records if the
contingency is likely and the amount of the liability can be reasonably estimated. The liability
may be disclosed in a footnote on the financial statements or not reported at all if both
conditions are not met.
Pending lawsuits and product warranties are common examples of contingent liabilities
because their outcomes are uncertain. Accounting rules for reporting a contingent liability
differ depending on the estimated dollar amount of the liability and the likelihood of the event
occurring. The accounting rules ensure that financial statement readers receive sufficient
information.
Tata motors has the following contingent liabilities
As at March 31, 2019, the Excise Authorities have raised a demand and penalty of `243.24
crores, (`239.95 crores as at March 31, 2018), due to the classification of certain chassis (as
dumpers instead of goods transport vehicles) which were sent to automotive body builders by
the Company, which the Excise Authorities claim requires the payment of the National
Calamity Contingent Duty, or NCCD.
Other amounts for which the Company may contingently be liable aggregate to `436.08 crores,
which includes `21.54 crores in respect of equity accounted investees as at March 31, 2019,
which are due to certain states levy octroi duty, Sales tax / VAT, possession tax.