Volkswagen sues India to quash 'enormous' $1.4 bn tax demand, legal filing shows
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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 attract a 30-35% 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% levy.
Volkswagen India had kept the Indian government informed of its «part-by-part import» model and received clarifications in its support in 2011, the company says in the court challenge.
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