Published 16:50 IST, February 2nd 2025 Volkswagen has sued Indian authorities to quash an "impossibly enormous" tax demand of $1.4 billion, arguing the ask is contradictory to New Delhi's import taxation rules for car parts and will hamper the company's business plans, court papers show. Volkswagen Law Suit: Volkswagen has sued Indian authorities to quash an "impossibly enormous" tax demand of $1.
4 billion, arguing the ask is contradictory to New Delhi's import taxation rules for car parts and will hamper the company's business plans, court papers show. Volkswagen's unit, Skoda Auto Volkswagen India, also told the High Court in Mumbai the tax dispute puts at risk its investments of $1.5 billion in India, and is detrimental to the foreign investment climate, according to the 105-page filing which is not public but was reviewed by Reuters.
In the biggest-ever import tax demand, India in September slapped a $1.4 billion tax notice on Volkswagen for using a strategy to break down imports of some VW, Skoda and Audi cars into many individual parts to pay a lower duty. Indian authorities alleged Volkswagen imported "almost the entire" car in unassembled condition - which attracts a 30-35 per cent tax applicable on CKDs, or completely knocked down units, but evaded the levies by mis-classifying them as "individual parts" coming in separate shipments, paying just a 5-15 per cent levy.
Volkswagen India had kept the Indian government informed of its "part-by-part import" model and recei.