Volkswagen has strongly contested the tax discover, arguing that the department has acted with an unreasonable delay of 14 years. The corporate contended that the discover issued in 2024 is predicated on a 2011 notification, leaving them in an irretrievable state of affairs the place they can not go on the tax burden to prospects. Volkswagen acknowledged that had the readability been offered in 2011, they might have had the choice to both modify their pricing technique accordingly or rethink their operations in India fully.
Moreover, Volkswagen argued that it had obtained a clarification from the income secretary at the time, which affirmed that the firm was inside its rights to assert a decrease tax fee of 5%-15%. This, they declare, additional helps their place towards the substantial tax demand imposed by the department.
The tax department, nonetheless, dismissed Volkswagen’s stance, asserting that the firm is trying to painting itself as a victim when it’s liable for failing to pay the acceptable tax quantity. The department maintained that the delay in enforcement doesn’t absolve Volkswagen of its tax liabilities and that the firm ought to have adhered to the 2011 notification requiring a better tax outgo.
A key focus of the tax department’s argument is Volkswagen’s Aurangabad facility, which produces a number of excessive-premium fashions. The department identified that the native worth addition at the facility is lower than 3%, with the bulk of the automobile parts being imported. Because of this, they argue that the tax invoice precisely displays the firm’s tax obligations.
Moreover, the department emphasised that different automakers in the section, together with Maruti, Kia, Mercedes, and Volvo, have complied with the 2011 notification and are paying a better tax fee of roughly 30%-35%.
These had been the preliminary submissions introduced by either side, and the arguments are set to proceed subsequent week on Monday.
(Edited by : Ajay Vaishnav)
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