Mumbai, February 18, 2025 – German auto giant Volkswagen AG has moved the Bombay High Court against a staggering $1.4 billion (₹11,600 crore) tax demand imposed by the Indian Customs Department. The company has termed the situation as a matter of "life and death" for its operations in India.
The tax demand stems from an alleged underpayment of customs duties on Volkswagen’s imports. The Directorate of Revenue Intelligence (DRI) has accused the automaker of misdeclaring certain components to avail lower import duties. The claim has led to a hefty tax demand along with interest and penalties.
Volkswagen, however, has strongly refuted the allegations, arguing that the customs authorities have misinterpreted the import classifications. The company has sought urgent relief from the Bombay High Court, citing that such an enormous financial burden could significantly impact its business in India.
In its petition, Volkswagen stated that the tax demand threatens its viability and could hamper future investments in India. The company also warned that this move might impact thousands of jobs and disrupt its supply chain.
The matter is expected to be heard by the High Court in the coming days. Meanwhile, industry experts are closely watching the case, as it could set a precedent for global automakers operating in India.
This legal battle comes amid the Indian government’s aggressive stance on tax compliance and increasing scrutiny of multinational corporations. If Volkswagen fails to secure relief, it may have to explore further legal options, including an appeal before higher judicial authorities.
