Volkswagen India takes legal action over $1.4 billion tax claim

Skoda Auto Volkswagen India (SAVWIPL) has approached the Mumbai High Court in response to a $1.4 billion tax demand issued by Indian authorities. The company has confirmed that it is pursuing all available legal remedies following the Show Cause Notice, in line with Indian legal provisions, CNBC-TV18 reported.

In an official statement, SAVWIPL reiterated its commitment to operating as a responsible and compliant organization, emphasizing its adherence to both global and local regulations. “Compliance with regulatory requirements is one of SAVWIPL’s fundamental principles, and we are cooperating fully with the authorities on this matter,” the company said.

The tax notice, issued in September 2023, accuses Volkswagen of breaking down imports of certain VW, Skoda, and Audi cars into individual parts to reduce duty payments. SAVWIPL, however, has argued that the tax demand contradicts the government’s stance and undermines the trust of foreign investors. The company stated in its January 29 court filing that the notice threatens the very foundation of faith and trust that foreign investors expect from India’s legal and regulatory framework.

The legal battle is expected to be closely watched by both the automotive industry and foreign investors in India.