Shifting-Gears

Key highlights Volkswagen legally rejects the $1.4 billion tax fraud claim Sues Indian authorities for false tax fraud claims VW-Skoda claims that the tax demand is an anti-import tax policy The grapple between Volkswagen and Indian authorities has taken a new turn-around. The German car manufacturer has rejected the tax fraud claims of the Indian government legally. Read the complete details of the VW issue below. Also read: Top 7 segment-first features of Kia Syros to know before buying Volkswagen vs Indian authorities - what is exactly happening? Last year in September, Indian finance authorities sent a legal notice to VW India, claiming that a $1.4 billion tax is pending from its side. However, things took a legal turn and the brawl has not taken a turn-around as VW has legally rejected the tax fraud claim. As per an online report, the latest advancement in the case is that VW has claimed that the tax demand is anti to the government's import and taxation policy for foreign manufacturers. Hence, the tax demand is wrong and the right amount has already been fulfilled by the company, as per the latest claim. Additionally, VW claims that the tax demand by the Indian authorities not only discourages foreign manufacturers from operating in India but will also put a risk on its $1.5 billion investments for Indian operation expansion. As per the tax demand details, VW used to import "nearly complete cars" in India by 'misusing' the spare part import policy for less taxation. These imports were either 'misclassified' or 'mis-declared' by the company to save import duties. The total tax stands at $2.35 billion, out of which the company has paid $980 million, while the remaining $1.4 billion remains pending. Currently, there is no official statement from Volkswagen or Indian authorities on the case. Also read: Tata Curvv Dark Edition under development, launch soon? Our verdict Tax fraud is not a new issue with manufacturing and sales as it has been a consistent struggle for Indian authorities to deal with it. However, the case involving Volkswagen-Skoda has more to it. The company's claims reject the tax demand by the Indian government, which will be cleared out once the final verdict by the court is out. Source

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