German automotive giant Volkswagen announced on Friday that it is fully cooperating with Indian authorities after receiving a show cause notice regarding alleged customs duty fraud. The notice reportedly pertains to a sum of approximately ₹11,000 crore (around USD 1.4 billion) linked to the import of vehicles as completely knocked down (CKD) units.
“We are analysing the notice and extending our full cooperation to the authorities,” Skoda Auto Volkswagen India stated.
Although the company did not provide detailed information about the notice, it emphasized that, as part of a global conglomerate, it is “a responsible organisation, fully complying with all global and local laws and regulations.”
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The alleged fraud reportedly involves misrepresentation of imports, with the group accused of declaring individual components rather than fully assembled CKD kits, which attract higher import duties. The Volkswagen Group, operating through its brands such as Audi, Volkswagen, and Skoda, assembles various models in India, including the Octavia, Superb, Kodiaq, Passat, Jetta, and Tiguan.
In 2019, Volkswagen Group India consolidated its three passenger car subsidiaries into a single entity, Skoda Auto Volkswagen India, to enhance operational efficiency and target significant market share growth for its Volkswagen and Skoda brands by 2025. Earlier, in July 2018, the group committed investments of 1 billion euros under its India 2.0 project.
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