India defends $1.2 billion tax demand against Volkswagen in court
India is defending its $1.2 billion tax demand against Volkswagen in court, claiming the carmaker tried to dodge higher tariffs by labeling imported cars as separate parts.
This move let Volkswagen pay much lower import fees: 5% to 15% instead of the 30% to 35% tax rate it should have paid for an unassembled car.
The case matters for VW, which currently holds just a tiny 2% slice of India's massive car market.
Hearing on Volkswagen tax dispute Tuesday
India's legal team says Volkswagen hasn't played fair or shared information on time, calling the company "didn't provide the information sought in time" during the investigation.
On the flip side, VW argues that officials stretched out their probe well past the five-year limit and unfairly checked imports going back 12 years.
The next hearing is set for Tuesday, and whatever happens could shape how other foreign companies handle taxes in India going forward.