New Delhi, Feb 3 (PTI) – Skoda Auto Volkswagen India has taken legal action against Indian tax authorities following a show cause notice demanding Rs 11,000 crore (approximately USD 1.4 billion) over alleged customs duty fraud. The company has filed a case in the Bombay High Court contesting the charges linked to the import of cars as completely knocked down (CKD) units.
In response to inquiries, Skoda Auto Volkswagen India stated that it is utilizing all legal options available under the law. The company reaffirmed its commitment to regulatory compliance, stating, "Skoda Auto Volkswagen India is committed to operating as a responsible organisation, ensuring full compliance with all applicable global and local laws and regulations." It further added that compliance with legal and regulatory requirements remains one of its core principles and that it is fully cooperating with authorities on the matter.
The Volkswagen Group, under Skoda Auto Volkswagen India, has been accused of misrepresenting its import practices by allegedly declaring car parts as individual units rather than components of a CKD unit, a move that carries lower import duties. The alleged violation applies specifically to models imported under the CKD route, which include popular vehicles such as the Octavia, Superb, Kodiaq, Passat, Jetta, and Tiguan.
Skoda Auto Volkswagen India's legal battle comes in the wake of a broader corporate restructuring. In 2019, Volkswagen Group India consolidated its three passenger car subsidiaries into Skoda Auto Volkswagen India to enhance operational efficiency. The move aimed to strengthen Volkswagen and Skoda’s market presence, aligning with their India 2.0 strategy, which saw a planned investment of 1 billion euros announced in July 2018.
The outcome of the legal proceedings in the Bombay High Court will be closely watched, as it could have significant implications for the company’s operations and India’s automotive import policies.
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