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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Australia and India have finalised an agreement allowing Australian uranium exports for India's nuclear energy sector, expanding cooperation on clean energy, critical minerals and infrastructure as the two countries strengthen their strategic and economic partnership.
For the first time in six years, Indian traders are crossing through the Lipulekh Pass in the Himalayas into Tibet to do business.
India and the U.S. are close to finalising a long-awaited trade agreement, Indian Trade Minister Piyush Goyal said on Thursday after the latest round of negotiations with U.S. Trade Representative Jamieson Greer.
Indian National Security Adviser Ajit Doval and Chinese Foreign Minister Wang Yi held talks in New Delhi on the sidelines of the BRICS security advisers’ meeting, in the latest sign of gradual efforts to stabilise ties after years of border tensions.
The 4th Shusha Global Media Forum will bring together nearly 160 media leaders, experts and officials from 54 countries in Azerbaijan's historic city of Shusha on 13-14 July, to discuss journalism’s role in peacebuilding, restoring public trust and tackling challenges.
Typhoon Bavi, the strongest storm to hit the eastern coast of mainland China this year, brought heavy rain, strong winds, flooding and landslides after making landfall in Zhejiang province on Sunday. More than 2.8 million people were evacuated to safety ahead of the storm.
President Ilham Aliyev is holding his annual question-and-answer session with international journalists at the 4th Shusha Global Media Forum in Azerbaijan.
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Start your day informed with AnewZ Morning Brief. Here are the top news stories for the 13th of July, covering the latest developments you need to know.
Iran’s Islamic Revolutionary Guard Corps (IRGC) said on Tuesday that its Navy had struck U.S. military barracks, a satellite communications centre and a Patriot missile battery in Bahrain, while its Aerospace Force targeted an airbase in Jordan.
A newly introduced refereeing protocol has intensified debate over fairness at the FIFA World Cup, with another controversial decision involving defending champions Argentina fuelling criticism from fans and former officials.
A United Nations official has accused Hamas of interfering with humanitarian aid distribution in the Gaza Strip, adding further pressure on civilians already facing severe shortages and worsening living conditions.
Australia's internet safety regulator has accused some of the world's biggest technology companies of failing to do enough to combat child sexual abuse and the growing threat of online sexual extortion.
U.S. Immigration and Customs Enforcement (ICE) officers fatally shot a driver in a coastal town of Maine on Monday, less than a week after an ICE agent in Houston, Texas, shot and killed a man in a traffic stop during a deportation crackdown there.
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