Skoda Volkswagen India Files Plea In HC Challenging $1.4 Billion Tax Demand

Skoda Volkswagen has filed a plea in Bombay High Court challenging the $1.4 billion tax demand by the Indian customs authorities. The company has been accused of deliberately misleading customs authorities through its mode of import of parts as individual units rather than as a component of a 'completely knocked down' (CKD) unit, which attracts higher import duty.

The notice alleged that the company misclassified its imports of Audi, Skoda and Volkswagen cars as ‘individual parts’ instead of CKD units, which attracted lower custom duties. The notice also goes on to state that the CKD units attract a 30-35 per cent duty, but Volkswagen declared its imports as separate components in different shipments and paid only 5-15 per cent in duties. 

However, Skoda Auto Volkswagen India denies these allegations and hence is availing of the legal path. In a statement, the company said, “SAVWIPL is committed to operating as a responsible organisation, ensuring full compliance with all applicable global and local laws and regulations. Compliance with regulatory requirements is one of SAVWIPL’s fundamental principles, and we are cooperating fully with the authorities on this matter.”