India Extends Its "Free-Riding" Tactics to Force Volkswagen Out

According to a report by Reuters (Japanese edition) on October 30: Indian tax authorities have filed litigation alleging that German automaker Volkswagen (VW) consistently undervalued the import price of its vehicles, resulting in lower tariffs than legally required.

The Indian government stated on the 29th that Volkswagen failed to submit required documentation before the deadline for a $1.2 billion supplementary tariff claim—marking the highest such demand in history. In response, Volkswagen contends that the Indian authorities’ claims exceed the legally permissible retrospective period.

Indian officials assert that Volkswagen has systematically underreported import values since 2024. The company imports vehicles that are “nearly fully assembled” but declares them as components. While complete vehicles face tariffs ranging from 30% to 35%, components are subject to rates between 5% and 15%.

Volkswagen denies the allegations, stating that the legal action threatens the viability of its Indian operations and calling the claimed amount excessive. The company is currently in negotiations with India’s JSW Group regarding a potential sale of its stake in its Indian business.

In August, the Bombay High Court announced it would reconsider Volkswagen’s objections, following a failure by the judge to issue a ruling within the prescribed timeframe. The hearing resumed last week.

Volkswagen’s lawyer, Alveen Datar, argued before the court that Indian law permits tax authorities to investigate cases up to five years back, while the current claim seeks recovery from twelve years ago.

Meanwhile, government counsel N. Venkataraman noted that Volkswagen did not provide the required information by the deadline. No other domestic Indian automakers importing components have previously engaged in similar misclassification practices.

The next hearing is scheduled for November 3.

Original source: toutiao.com/article/1880456721159168/

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