In a stern warning to the automaker, the Indian government told a Mumbai court that quashing Volkswagen's demand to cancel a $1.4 billion tax bill would have "catastrophic consequences" and could encourage companies to withhold information and delay inquiries.
The tax demand—India's highest-ever for back taxes related to import duties—stems from a 12-year review of shipments by Skoda Auto Volkswagen India. The tax authority alleges that the carmaker misclassified component imports for Audi, VW, and Skoda models to evade higher tariffs. In its latest filing, the tax authority argued that Volkswagen intentionally submitted crucial data in separate tranches, thereby impeding timely shipment reviews. Accepting VW's reasoning, the filing warned, would allow importers to suppress vital information and claim that the statutory time limit for conducting tax probes had expired—a scenario that could have "catastrophic consequences" for regulatory oversight.
Volkswagen has described the case as a "matter of life and death" for its India business, contesting the tax authority’s findings by pointing to alleged inaction and tardiness by officials in reviewing its shipments. The carmaker contends that if New Delhi had completed its reviews earlier, it could have re-evaluated its import strategy or challenged the findings more effectively. The tax notice, issued in September 2024, has rekindled foreign investors’ concerns about prolonged and uncertain tax investigations in the country.
If found liable, Volkswagen could face a total tax bill of up to $2.8 billion, including penalties and delayed interest. The dispute comes at a time when Prime Minister Narendra Modi’s government has been actively courting foreign investment with promises of streamlined regulations and reduced bureaucratic hurdles. However, lengthy tax probes continue to be a sore point for international investors.
The case, which highlights the delicate balance between regulatory enforcement and investor confidence, will be heard on Monday. Neither Volkswagen nor the Indian government has responded to requests for comment.
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Hindu devotees in the northern town of Barsana in Uttar Pradesh celebrated ‘Laddoo Holi’ on Tuesday (24 February), a traditional pre-Holi ritual honouring the Hindu deity Krishna.
U.S. President Donald Trump’s new 10% global tariffs have come into effect, hours after the Supreme Court blocked many of his sweeping import taxes in a 6–3 ruling. Allies around the world are weighing possible retaliation, while markets brace for further upheaval.
India and Brazil signed a mining and minerals cooperation pact on Saturday (21 February), as Prime Minister Narendra Modi said the two countries aim to increase bilateral trade to more than $20 billion within five years.
The U.S. military carried out a strike on Friday (20 February) against a vessel allegedly involved in narcotrafficking in the Eastern Pacific, according to U.S. Southern Command (SOUTHCOM).
Follow the latest developments and global reaction after the U.S. and Israel launched “major combat operations” in Iran, prompting retaliation from Tehran.
Tensions between the U.S. and Iran are escalating, with Washington ordering a significant military build-up in the region and multiple countries evacuating diplomatic staff amid fears of further instability.
Two people were killed and around 40 injured when a tram derailed in central Milan on Friday (27 February), a spokesperson for the local fire service said.
Governments across the region responded swiftly to Israel’s strikes on Iran, closing airspace, issuing travel advisories and activating contingency plans amid fears of escalation.
Pakistani air strikes hit a weapons depot on the western outskirts of Kabul overnight, triggering hours of secondary explosions that rattled homes across the Afghan capital and left residents fearing further violence.
A senior Iranian official has warned Israel to “prepare for what is coming”, insisting that Tehran’s response to the latest escalation in the Middle East will be made openly and without limits.
Cuba has released extensive details of a deadly midweek shootout at sea, showing rifles, pistols and nearly 13,000 rounds of ammunition that it says were carried by a group of exiles who attempted to enter the island by speedboat.
Afghanistan’s Taliban rulers said on Friday (27 February) they were ready to negotiate after Pakistan bombed their forces in several Afghan cities, including Kabul and Kandahar, and Islamabad declared the neighbours were now in "open war".
Tensions between the U.S. and Iran are escalating, with Washington ordering a significant military build-up in the region and multiple countries evacuating diplomatic staff amid fears of further instability.
Two people were killed and around 40 injured when a tram derailed in central Milan on Friday (27 February), a spokesperson for the local fire service said.
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