Bombay HC hearing Volkswagen's $1.4B tax dispute on October 21
What's the story
The Bombay High Court has ordered a fresh hearing in Volkswagen's $1.4 billion tax dispute with Indian authorities, starting October 21. The decision comes nearly 18 months after the initial arguments were concluded. The court also said that the interim relief granted to the German carmaker will continue until the next hearing date, offering temporary protection while the matter is reheard.
Case re-hearing
Case de-reserved after being reserved in April 2025
The court's decision to de-reserve its judgment in the case comes after it was reserved in April 2025 but never delivered.
The court said it couldn't pronounce the verdict "due to the exigency of work," leading to cancellation of the earlier reservation and necessitating a fresh hearing before a new bench.
The dispute dates back to September 2024 when Indian customs authorities accused Volkswagen of evading import duties by mis-declaring components.
Duty evasion claims
VW allegedly mis-declared components to evade import duties
Investigators claimed that Volkswagen's India unit, Skoda Auto Volkswagen India, imported "almost the entire" vehicle in unassembled form for cars like Audi A4, Skoda Superb, and Kodiaq, and Volkswagen Tiguan.
Such completely knocked-down units attracted a 30-35% import tax.
However, authorities claimed the firm split shipments into hundreds of separate consignments to pay a lower 5-15% duty applicable to individual parts.
Case defense
VW has contested the claims
Volkswagen has contested the claim, arguing that it didn't import components as a single assembled "kit" but shipped them separately before combining them with locally sourced parts.
The company also disputed allegations of using internal software to coordinate the split shipments, saying the system was only meant to help dealers track consumer demand.
A new bench will be constituted in about four weeks for this case.