The Indian government has issued a notice to Volkswagen, alleging that the company evaded taxes worth $1.4 billion by mis-declaring and misclassifying imports as individual parts, rather than as completely knocked-down (CKD) units. This allowed Volkswagen to pay lower taxes, as CKD units are subject to a 35% import duty, while individual parts are taxed at 5-15%. The company allegedly imported most of its car parts in unassembled condition and then assembled them locally, evading higher taxes. The models involved include Audi’s A4 and A6 sedans, Skoda’s Octavia and Superb sedans, and VW’s Tiguan SUV. The Indian authorities have accused Volkswagen of using its internal procurement software to place orders for cars, specifying models and colors based on sales team projections, and then tracking and managing inventory at its assembly plant. The company’s suppliers in Germany, the Czech Republic, and Hungary sent individual parts to a consolidation center, which was then shipped to India. The authorities believe that Volkswagen intentionally used this logistical model to avoid paying higher taxes.
Volkswagen allegedly avoids paying taxes of $1.4 billion in India.
 "Volkswagen allegedly avoids paying taxes of .4 billion in India.")