Govt Targets VW in $1.4B Tax Dispute, Says Kia Corrected Course

Documents pertaining to the matter reveal Kia did change its import practice after being reprimanded, but Volkswagen has been accused of being the sole automaker who incorrectly categorized all their car imports for 12 years, which allowed them to escape taxes worth $1.4 billion. The Audi brand of Volkswagen does not perform well in India which unlike Kia is the third largest automotive market globally. If Volkswagen is found guilty, they may have to pay up to $2.8 billion along with delayed interest and penalties.

Volkswagen's unit in India claims that the “life and death” matters of Germany are blamed on the tip of the iceberg in the tax demand. A record tax in India’s history has always raised skepticism amongst the investors. They worry: are these endless disputes too much trouble for us? 

VW’s tax lawyers have admitted Indian authorities have accused them of using a very clever method of splitting shipments of parts as auto components rather than complete units. Unfortunately for VW, India has set a new record in the import tax in their history. 

While countering VW's court plea, the tax authorities provided proof in the form of 10 car manufacturers which were Mercedes Benz, BMW and Hyundai who did accurately declare their imports and also made use of split consignment for parts.

About tax demand of 155 million Volkswagen repeatedly claimed that company VW Canada limited, part of the group, has luxury minivan ‘Kia Carnival’, and the Carnival was already branded under the company name. documents were seized during the investigation. Everything was Randolph into blurs, and there were post investigation inquires from Wensislao…”and “pre21 82671 33”and “ISIN CA9939281033 WHL,” bland American names, shrouded under this “Kia Carnival”, that hide bloomy German time. For tiger on shaw there were knees. That are excruciating, ruthless and sharp.

The firm contended that the tax demand goes against the company’s own New Delhi's tax policies that revolve around the imports of car parts. Legal representatives from both sides have clashed in ongoing court sessions over the appropriate categorization of imports.

“Don't be a victim here,” said N. Venkataraman, India’s additional solicitor general last week in his rant against Volkswagen in court. “If you breach the law, then rest assured action will be taken."