Volkswagen Battles $1.4 Billion Tax Dispute with Indian Authorities

Volkswagen is challenging a $1.4 billion tax demand from Indian authorities, claiming it contradicts import taxation laws and threatens $1.5 billion in investments. The dispute centers on allegations of tax evasion by misclassifying car imports. The High Court in Mumbai will hear the case on February 5.

Volkswagen has initiated legal proceedings against Indian authorities to annul an immense $1.4 billion tax demand. The German automaker argues that this demand is contradictory to India's import taxation regulations for car components and jeopardizes its business strategies.

The dispute, the largest of its kind in import taxes, accuses Volkswagen of deploying a strategy to deconstruct car imports into parts to incur lower duties. Indian officials alleged that Volkswagen circumvented higher levies by importing nearly entire cars in unassembled shipments, classified as parts.

Volkswagen's unit in India has labeled the notice as contradictory to prior governmental assurances, suggesting a risk to foreign investment confidence. With a hearing scheduled for February 5, Volkswagen maintains its legal compliance and commitment to cooperate with authorities.

(With inputs from agencies.)