$1.4 bn tax demand on Volkswagen: Bombay HC asks Customs to file affidavit on time limitation
Bombay High Court on Wednesday directed the Customs department to explain through an affidavit how its September 2024 show-cause notice raising a tax demand of $1.4 billion from Skoda Auto Volkswagen India was not barred by limitation. A division bench of Justices B P Colabawalla and Firdosh Pooniwalla has been extensively hearing the plea filed by the automobile company challenging the notice on the grounds that it was arbitrary and illegal.
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The auto major has called the demand for $1.4 billion, over Rs 12,000 crore, «exorbitant».
In its notice, Customs said the company provided misleading information, concerning its imports, to the department.
The Customs has claimed that the company misclassified its imports of Audi, Skoda and Volkswagen cars as «individual parts» instead of «Completely Knocked Down» (CKD) units, thereby paying significantly lower customs duties.
The main contention of the company was that the department could not have raised the tax demand after all these years. The company has contended that it has been paying tax for over a decade under the individual parts category.
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