German car-maker Volkswagen has found itself embroiled in a legal tussle in India after the central excise department of Pune, India, penalised the company Rs 600 crore for allegedly evading taxes.
According to a report in the Financial Express, the central excise department has charged three Volkswagen firms for wilful tax evasion to the tune of Rs 323 crore.
The emerging reports suggest that the vehicles in question were sold in the country between January 2010 and December 2014, but were undervalued to evade taxes. Further, the report adds the adjudication order passed by the principal commissioner of central excise department in Pune also upheld the penalty for Rs 323 crore imposed on the three firms of Volkswagen, namely Volkswagen India, Skoda Auto Aurangabad and Volkswagen Group Sales India, taking the total liability on the firm to a whopping Rs 646 crore.
"Volkswagen India would like to confirm that it has received the said order. However, we are still evaluating the details. Volkswagen has been doing all its transactions at an arm's length and as per the well accepted industry practices. We will appeal against the order," said Volkswagen in response to International Business Times, India query.
The report, citing Directorate General of Central Excise Intelligence (DGCEI), states that while the three firms of Volkswagen are liable to pay duty on the actual price at which the cars are sold by the sales office of Volkswagen in India, they paid the value of the car at the factory gate. This allegedly violates the norms "as the firms are related parties," states the report.
"We have evidence to prove that the price at which their sales centre is selling to the customer is actually the price on which they should pay duty to government," the publication quoted an official as saying.
Last year, Volkswagen had run into deep trouble after the company was exposed of using a cheat device in some of its diesel cars to pass emission tests illegally.