Customs Commissioner Refutes Volkswagen: Alleges That German Automaker Delayed 12,000 Crore Tax Evasion Case
We are all aware of the ongoing issues between the government and the German car manufacturer Škoda Auto Volkswagen India Pvt. Ltd. Indian tax authorities have now come forward and blamed the manufacturer for the delay in its provisional assessment of $1.4 billion, which is around ₹11,526 crore in tax demand. The Indian authorities said that Škoda did not provide them with the needed information promptly.
Škoda had approached the high court on 29 January this year against the customs department. The move was over the department’s demand for duty at Completely Knocked Down (CKD) rates on imported car components over the past 12 years. The department issued a notice as well, where they threatened the manufacturer and informed them that the department would confiscate the imported goods.
What’s The Issue?
Škoda Auto Volkswagen India Pvt. Ltd. is currently being accused of tax evasion. As per the notice, the car manufacturer has been underpaying the import duties on car components for the last 12 years.
According to the claims, the company imported Completely Knocked Down Kits (CKDs), deliberately misinterpreting them as car parts.
They imported car parts for their models in India and paid only 15 percent tax due to this misinterpretation. Had they labeled the parts as CKD kits, they would have had to pay 30–35 percent. In this way, the manufacturer saved a huge amount that was supposed to be paid to the government as taxes.
Mint wrote to the manufacturer about the ongoing issue and received a reply that said: “We, at Škoda Auto Volkswagen India Pvt. Ltd., acknowledge the ongoing proceedings and are actively pursuing all legal remedies available to us under the law. As this matter is currently under legal review, we cannot provide further comments at this moment.”
The customs commissioner said that the proceedings were taking time due to the ongoing Special Valuation Branch (SVB) investigations. This team inspects the import transactions between Škoda and its related parties.
The investigation authority claimed that they consistently asked for necessary information, data, and documents from Škoda Auto, but the company failed to provide them on time.
According to the affidavit:“Škoda's email indicated why the provisional assessments are pending and that Škoda would attempt to give a closure by June 2024. Škoda also gave an Action Plan which stated that it was in the process of obtaining the cost computation or collation of data from the foreign supplier, and Škoda in most of the cases has not given the details even today.”
The tax department’s affidavit also revealed an investigation by the Directorate of Revenue Intelligence (DRI). In this investigation, it was revealed that a significant number of agreements were entered into by Volkswagen Group Sales India Pvt. Ltd., some of which were allegedly concealed by Škoda.
In court, the department further argued that Škoda had presented an incomplete picture by withholding relevant correspondence and documents. The investigation department has urged the High Court to dismiss Škoda’s writ petition. They will also be appointing an adjudicator at the rank of commissioner for show-cause notices and simultaneously finalizing the provisional assessments within six to eight months.
via: Livemint