Skoda Auto Volkswagen India (SAVWIPL) has received a notice from the Indian tax authorities for alleged tax evasion of approximately $1.4 billion (Rs 9,500 crore). The notice is related to the company’s tax returns from 2011 to 2017. The tax department claims that SAVWIPL understated its sales and income during this period, resulting in a significant tax evasion. The company has been accused of misrepresenting its financials to avoid paying taxes.
The notice was issued by the income-tax department under Section 154 of the Income-tax Act, 1961, which allows the department to issue a notice to the assesse (person) for any discrepancy or error in the return filed. The SAVWIPL has been given a timeline to respond to the notice and provide explanations for the alleged discrepancies. If the company fails to respond or the explanation is unsatisfactory, the tax authorities may impose a penalty or even initiate criminal proceedings.
This is not the first time SAVWIPL has faced tax-related issues in India. In the past, the company has been accused of tax evasion and has faced intense scrutiny from the tax authorities. This latest development highlights the importance of maintaining transparency and accuracy in financial reporting to avoid such issues.