Previously, SAVWIPL was issued a 12000Cr tax evasion notice from the Indian government. For those who are unaware, according to some allegations and reports, SAVWIPL had miscategorized importing individual parts, where they actually imported a whole unassembled car to India as a CKD. Doing this procedure helped SAWVIPL lower import duties from 30-35% to 5-15%. This was done for cars such as the VW Tiguan, Skoda Superb, Audi Q5, etc.
Authorities said SAVWIPL used “Clandestine” software to place bulk orders from suppliers. The software broke down orders into required parts which were imported into the country. This enables a manufacturer to evade hefty taxes levied on their imported cars. SAVWIPL made full use of this strategy by importing a fully unassembled car to India and assembled the parts in their factories.
Now, according to recent developments, SAVWIPL has sued the Indian Government to dismiss the 12000Cr tax demand. If SAVWIPL loses the plea, they might have to pay 24000Cr adding penalties to the Indian Government.
SAWVIPL, in their defense, claim that they did not import car parts together as a single kit to comply with CKD tax, but they shipped each part separately. The company further argued that this tax dispute would affect India’s future foreign investment potential.
If SAVWIPL lose their plea, it might hamper the brand’s future in India, as they will have to pay a hefty price if proven wrong.
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