Volkswagen, Kia under scanner for mis-declaration

Revenue officials and the Customs department are behind top car manufacturers – Germany’s Volkswagen and Korea’s Kia – for allegedly evading customs duty while importing parts for cars. For some of the high-end cars, the parts were to be imported in complete knock-down (CKD) but were instead brought as components through different ports to evade tax authorities, sources said.

Two years ago, the CKD consignments attracted 35 per cent duty. This was mis-declared by bringing it as components for which the duty rates ranged between 7 per cent and 15 per cent.

Sources said that one of the major auto majors is also being investigated for any evasion.

Sources said that the trigger came from the Directorate of Revenue Intelligence, and the Customs issued a show cause notice to Kia, which has a plant at Ananthapur in Karnataka. Similarly, a notice was issued to the German car maker.

Various reports say that the tax demand with Volkswagen was of $1.4 billion and around $150 million with Kia.

Sources said the consignments are moved directly to the plant from the port using the Green Channel. Meanwhile, the Bombay High Court has listed Volkswagen matter for February 17.