Skoda Auto Volkswagen must fall in line and not play victim: Customs dept to Bombay HC

The Customs Department on Thursday told Bombay High Court that Skoda Auto Volkswagen 'will have to fall in line' and 'not play victim', amid a tax dispute, which involves a demand of over $1.4 billion.

On Monday, the Customs Department told the Bombay High Court that it would not seize any consignments from Skoda Auto Volkswagen India Pvt Ltd despite the ongoing tax dispute.

Skoda Auto Volkswagen India is challenging a show-cause notice issued by tax authorities, which demands Rs 11,000 crore (around $1.4 billion) for alleged customs duty fraud related to importing cars as completely knocked down (CKD) units. The company has filed a case in the Bombay High Court to contest this notice.


In a February 3 statement, the company confirmed it is considering all legal avenues in response to the notice, as allowed by law.

"Skoda Auto Volkswagen India is committed to operating as a responsible organization, ensuring full compliance with all relevant global and local laws and regulations," the company said. "Compliance with regulatory requirements is one of the company's fundamental principles, and we are fully cooperating with the authorities on this matter."

The Volkswagen Group, led by Skoda Auto Volkswagen India in India, is under scrutiny for alleged customs duty fraud related to the import of cars as CKD units. The issue revolves around parts brought in under the CKD method, which are subject to higher duties.

The fraud allegations center on the practice of importing car parts separately rather than as a complete CKD unit, which would have incurred higher import duties.

This method is used for models like the Octavia, Superb, Kodiaq, Passat, Jetta, and Tiguan, which are assembled in India.