NEW DELHI, Feb 2 — Volkswagen has sued Indian authorities to quash an “impossibly enormous” tax demand of US$1.4 billion (RM6.24 billion), arguing the ask is contradictory to...
In the biggest ever import tax demand, India in September slapped a US$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. — Reutersas a first-time user . Exclusively for Malay Mail readers: Use codeNEW DELHI, Feb 2 — Volkswagen has sued India n authorities to quash an “impossibly enormous” tax demand of US$1.
Indian authorities alleged Volkswagen imported “almost the entire” car in unassembled condition — which attract a 30-35 per cent tax applicable on CKDs, or completely knocked down units, but evaded the levies by misclassifying them as “individual parts” coming in separate shipments, paying just a 5-15 per cent levy.
The Indian finance ministry and the customs official who issued the demand order did not respond to requests for comment outside regular business hours. The tax dispute comes at a time when Volkswagen is battling to cut costs to better compete with Chinese rivals and cope with weak demand in Europe. In December it announced 35,000 future job cuts in Germany. In its biggest market, China, the carmaker has said it will sell some of its operations.
And after the order was placed, the software broke it down into “main components/parts”, roughly 700-1,500 for each vehicle depending on the model, which were shipped separately over time.
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