Bombay HC to hear Volkswagen India's plea against $1.4 bn tax notice on Feb. 17

Bombay High Court to hear Skoda Auto Volkswagen India's plea challenging $1.4 billion tax demand on February 17.

The Bombay High Court on Wednesday (February 5, 2025) 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.

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

The automobile company last month filed a petition in the High Court, challenging a show-cause notice issued by the authorities in September 2024 under the Customs Act.

On Wednesday (February 5, 2025) the company's counsels 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 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.

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.