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Indian authorities have accused the Volkswagen Group of evading taxes worth $1.4 billion (Rs 118.6 billion) through import duty manipulation. Skoda Auto Volkswagen, under the Volkswagen Group, imported components under a lower tax category, evading taxes worth Rs 11,865 crore. The car models involved include Audi A4 and A6, Q5 and Q7, Skoda Octavia and Superb, its Kodiaq SUV, and Volkswagen’s Tiguan SUV. Authorities claim Volkswagen intentionally mis-declared and mis-classified component imports to avoid paying higher taxes.
Volkswagen states it complies with Indian laws and is cooperating with authorities. However, authorities say their scrutiny revealed that Volkswagen classified components as “individual parts” to avoid higher duty. The company used NADIN and ProCKD software to manage orders and inventory, and placed multiple consignments in India to avoid detection.
The authorities claim this action is “intentional and deliberate” to avoid paying higher import duties, whereas Volkswagen claims it adopted this logistical model to improve efficiency. If proven true, this would be the largest case of import duty evasion in India’s history, significantly impacting the Volkswagen Group.