Volkswagen’s $1.4bn tax dispute goes to Bombay High Court.

• Volkswagen India, a car manufacturer with two manufacturing facilities in Pune and Chatrapati Sambhajinagar, filed the petition in January 2025.

• The company is accused of misleading customs authorities by importing parts as individual units instead of a component of a ‘completely knocked down’ (CKD) unit, which attracts a higher import duty.

• Customs authorities claim Volkswagen misclassified its imports of Audi, Skoda, and Volkswagen cars as individual parts, paying significantly lower customs duties.

• Volkswagen advocates argue that the concept of CKD parts was introduced in 2002 and lacked clarity until 2011.

• The DRI’s interpretation of the rules led to the massive tax demand, arguing that Volkswagen’s advocates argued thi