Business · Companies · 9 hrs ago
India and Volkswagen clash over $1.2 billion tax demand
India is defending a $1.2 billion tax demand against Volkswagen in a Mumbai court.
The government says the German carmaker undervalued imports for years and paid lower tariffs than required.
It alleges Volkswagen declared shipments as separate car parts, although they contained almost an entire car in unassembled form.
Volkswagen denies wrongdoing and says the demand came too late, arguing officials cannot review imports from more than five years earlier.
India says Volkswagen failed to provide requested information on time.
The dispute is India’s biggest-ever import tax demand and a major concern for Volkswagen’s business in the country, where it has about 2% of the car market.
The case will be heard again next Tuesday, as Volkswagen is also in talks with JSW about selling a stake in its Indian operations.
India defended its record $1.2 billion tax demand against Volkswagen in a Mumbai court on Thursday.
India alleges Volkswagen undervalued auto imports for years and paid lower tariff rates, while Volkswagen denies the allegations.
Volkswagen argued that Indian law did not allow tax authorities to scrutinise imports going back 12 years.
India said Volkswagen failed to provide requested information in time.
The case will next be heard on Tuesday next week.
- Who
- India and Volkswagen.
- What
- They clashed in court over a $1.2 billion tax demand concerning alleged undervaluation of auto imports.
- When
- The court hearing took place on Thursday; the case is next due to be heard on Tuesday next week.
- Where
- A Mumbai court.
- Why
- India alleges Volkswagen undervalued imports and paid lower tariffs. Volkswagen argues the demand came too late under Indian law.
India
Volkswagen
Tax demand
India
India says Volkswagen undervalued imports and paid lower tariff rates.
Volkswagen
Volkswagen denies the allegations.
Timing of scrutiny
India
India says Volkswagen did not provide requested information in time.
Volkswagen
Volkswagen argues authorities could not scrutinise imports going back 12 years because the law allows a look-back of up to five years.
India has alleged that Volkswagen undervalued auto imports for years and paid below the full tariff rates.
The High Court in Mumbai said it would hear Volkswagen's challenge afresh after judges failed to issue a ruling in time.
The dispute over the import tax demand restarted.
India and Volkswagen presented opposing arguments in a Mumbai court.
The case is scheduled to be heard again.
- Tax demand
- $1.2 billion
- Volkswagen's market share
- Roughly 2%
- Tariffs paid, according to India's allegations
- 5% to 15%
- Tariff rate India says should have applied
- 30% to 35%
- Look-back period argued by Volkswagen
- Up to five years under Indian law
2 sources
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