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Bombay High Court Agrees To Hear Volkswagen India's Challenge To 1.4 Billion USD Tax Demand By Customs Authorities
Narsi Benwal
5 Feb 2025 3:18 PM IST
The Bombay High Court on Wednesday agreed to hear on February 17, the petition filed by Skoda Auto Volkswagen India challenging the tax demand of USD 1.4 billion by Indian customs authorities.The petition was mentioned before a division bench of Justices Burgess Colabawalla and Firdosh Pooniwalla, which upon hearing the brief submissions, agreed to hear the matter at length on February 17. ...
The Bombay High Court on Wednesday agreed to hear on February 17, the petition filed by Skoda Auto Volkswagen India challenging the tax demand of USD 1.4 billion by Indian customs authorities.
The petition was mentioned before a division bench of Justices Burgess Colabawalla and Firdosh Pooniwalla, which upon hearing the brief submissions, agreed to hear the matter at length on February 17.
The customs authorities in India have accused Skoda Auto Volkswagen India, of misleading them 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. It had therefore, in September last year, issued a show cause notice to the automobile company under the Customs Act.
In the notice, it is alleged that the company misclassified its imports of Audi, Skoda and Volkswagen cars as "individual parts" instead of "completely knocked down" (CKD) units and therefore, paid significantly lower customs duties.
Notably, 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, the show cause notice, alleged.