India defended a proposed customs duty demand of ₹11,526 crore against ŠKODA Auto Volkswagen India Private Limited at the Bombay High Court on Oct. 29, in a case over how vehicle parts imported for local assembly should be classified.
The September 2024 show-cause notice sought the amount plus interest, Moneycontrol reported. The dispute covers imports brought in between March 2012 and July 2024, according to the outlet. Volkswagen Group’s 2025 annual report says the matter had not reached a final decision at the time of the report.
Customs alleges the shipments, declared as separate components, amounted to completely knocked down (CKD) vehicle kits. Reuters reported that the government cited duty rates of 30% to 35% for CKD imports, compared with 5% to 15% for individual parts.
Moneycontrol reported that Customs alleged the company used NADIN software to divide vehicle orders into component shipments and obtain lower duties. The company said the software supported production planning and demand tracking, the outlet reported. Moneycontrol described the potential liability as a significant financial risk to the company’s India operations if Customs prevails.
At the hearing, Senior Advocate Arvind Datar argued for Volkswagen that authorities could review only the previous five years under Indian law. Additional Solicitor General N. Venkataraman said the company had not delivered requested information on time, Reuters reported. Venkataraman also said, “No other company has challenged this.”
Volkswagen Group’s annual report said authorities had issued a show-cause notice in 2024. ŠKODA Auto Volkswagen India said it was “cooperating fully with the authorities on this matter.”
The case returned to court after an earlier bench released it without a ruling, Bar & Bench reported. Reuters reported the next hearing is scheduled for Tuesday, Nov. 3.
