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.
India’s Home Minister Amit Shah says the Indus Waters Treaty with Pakistan "will never be restored," accusing Islamabad of violating the agreement.
U.S. President Donald Trump hosted Pakistan’s army chief Field Marshal Asim Munir at the White House in a historic meeting, claiming credit for stopping the recent India-Pakistan conflict, though India denied any U.S. mediation.
Indian Prime Minister Narendra Modi has firmly denied claims that the United States played any role in mediating the recent ceasefire between India and Pakistan, according to India's top diplomat.
India expects to conclude a free trade agreement with the European Union by the end of 2024, Prime Minister Narendra Modi said during his visit to Cyprus.
At least six people were killed and several others injured after a bridge collapsed in Maharashtra’s Pune district.
NATO has confirmed that its 2026 summit will be hosted by Türkiye, with Albania set to host the following summit in 2027, according to the final declaration from the summit in The Hague.
Turkish President Recep Tayyip Erdogan met with British Prime Minister Keir Starmer on the sidelines of the NATO summit in The Hague to discuss key regional and global issues.
NATO allies have pledged to raise defence spending to 5% of GDP by 2035, a major increase aimed at countering long-term threats, particularly from Russia and terrorism.
The Kremlin on Wednesday said Tehran’s decision to suspend cooperation with the International Atomic Energy Agency (IAEA) is a "direct" result of the recent Israeli and US strikes on nuclear facilities in Iran.
King Charles will welcome U.S. President Donald Trump for a state visit later this year, marking the president’s second official visit to the U.K. under royal invitation.
Iran launched 18 ballistic missiles late Sunday targeting the U.S. military’s Al-Udeid Air Base in Qatar, the largest American installation in the Middle East.
Iranian missiles struck multiple locations across Israel and neighbouring regions early Friday morning, including a Microsoft office complex, according to emergency responders and local media reports.
A high-speed tram derailment in central Gothenburg, Sweden, has left at least eight people injured late on Thursday (19 June), after the vehicle slammed into a snack bar on Avenyn Avenue.
Wizz Air has suspended all flights to and from Tel Aviv, Israel, and its European services to Amman, Jordan, effective immediately until 15 September due to escalating situation in the Middle East. Also, the air carrier temporarily suspended its flights between Astana, Kazakhstan, and Abu Dhabi.
China has unveiled a mosquito-sized bionic drone designed for covert military operations and battlefield reconnaissance, marking a major advance in micro-robotics and stealth technology as part of the country’s growing focus on next-generation warfare capabilities.
NATO has confirmed that its 2026 summit will be hosted by Türkiye, with Albania set to host the following summit in 2027, according to the final declaration from the summit in The Hague.
Turkish President Recep Tayyip Erdogan met with British Prime Minister Keir Starmer on the sidelines of the NATO summit in The Hague to discuss key regional and global issues.
NATO allies have pledged to raise defence spending to 5% of GDP by 2035, a major increase aimed at countering long-term threats, particularly from Russia and terrorism.
The Kremlin on Wednesday said Tehran’s decision to suspend cooperation with the International Atomic Energy Agency (IAEA) is a "direct" result of the recent Israeli and US strikes on nuclear facilities in Iran.
King Charles will welcome U.S. President Donald Trump for a state visit later this year, marking the president’s second official visit to the U.K. under royal invitation.
NATO has confirmed that its 2026 summit will be hosted by Türkiye, with Albania set to host the following summit in 2027, according to the final declaration from the summit in The Hague.
Turkish President Recep Tayyip Erdogan met with British Prime Minister Keir Starmer on the sidelines of the NATO summit in The Hague to discuss key regional and global issues.
NATO allies have pledged to raise defence spending to 5% of GDP by 2035, a major increase aimed at countering long-term threats, particularly from Russia and terrorism.
The Kremlin on Wednesday said Tehran’s decision to suspend cooperation with the International Atomic Energy Agency (IAEA) is a "direct" result of the recent Israeli and US strikes on nuclear facilities in Iran.
King Charles will welcome U.S. President Donald Trump for a state visit later this year, marking the president’s second official visit to the U.K. under royal invitation.
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