Bombay HC to Rule on Volkswagen’s $1.4B Customs Duty Dispute

Bombay High Court is set to decide whether the $1.4 billion customs duty demand on Skoda Auto Volkswagen India is time-barred. The ruling could impact India's auto sector.

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Volkswagen argues that the demand is "unreasonable" as it comes after a decade of consistent tax classifications. The company claims the delay makes compliance difficult.

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The court clarified that its ruling will only focus on whether the show cause notice issued by Customs authorities is time-barred under the law.

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Customs authorities claim Volkswagen misclassified car imports to pay lower duties. They say the company declared CKD units as separate parts to reduce customs tax.

Volkswagen defends its classification and blames Customs for delaying investigations for over 12 years. The company says it followed all existing tax rules.

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The Bombay HC has granted Customs authorities time until March 10 to respond. If the demand is ruled invalid, the government may explore further legal action.

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