Bombay HC to hear Skoda Volkswagen's plea against USD 1.4 bn tax notice by customs officials on Feb 17

05 February,2025 03:35 PM IST |  Mumbai  |  mid-day online correspondent

The notice alleged that the company misclassified its imports of Audi, Skoda and Volkswagen cars as individual parts instead of CKD units, thereby paying significantly lower customs duties

Bombay High Court. File Pic


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The Bombay High Court on Wednesday said it would hear on February 17 a plea filed by Skoda Auto Volkswagen India challenging the tax demand of USD 1.4 billion by Indian customs authorities, reported news agency PTI.

The Volkswagen group, currently led in the country by Skoda Auto Volkswagen India, has been accused of deliberately misleading customs authorities.

The group allegedly misled authorities 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, as per PTI.

Last month, the automobile company filed a petition in the Bombay HC, challenging a show-cause notice issued by the authorities in September 2024 under the Customs Act.

The company's counsels on Wednesday mentioned the plea before a division bench of Justices B P Colabawalla and Firdosh Pooniwalla, seeking urgent hearing.

The high court agreed to hear the plea this month on February 17.

The notice alleged that the company misclassified its imports of Audi, Skoda and Volkswagen cars as "individual parts" instead of "completely knocked down" (CKD) units, thereby paying significantly lower customs duties, reported PTI.

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, it said.

The VW group, through its various brands, including Audi, VW, and Skoda, has sold a variety of models, which have been imported as CKD units and assembled in India, PTI stated.

Some of the models include Octavia, Superb, Kodiaq, Passat, Jetta and Tiguan.

According to PTI, Volkswagen Group India in 2019, received regulatory and statutory approvals to merge its three passenger car subsidiaries in the country into one entity, which is Skoda Auto Volkswagen India.

This step of merge its three passenger car subsidiaries in India was taken in order to work more efficiently at all levels to gain significant market shares for Volkswagen and Skoda by 2025.

In July 2018, the Volkswagen Group announced investments of around 1 billion euros as part of the India 2.0 project.

(With inputs from PTI)

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