Volkswagen Under Fire: India's Historic Tax Demand Sparks Legal Showdown

Volkswagen is facing a record $2.8 billion tax demand in India for allegedly misclassifying car imports to evade taxes. While Kia corrected similar practices, Volkswagen contests the charges. The court's decision, considered crucial for the company, is expected soon as legal battles with tax authorities intensify.

Indian tax authorities have accused Volkswagen of misclassifying car imports over 12 years to evade $1.4 billion in taxes, while rival Kia altered their approach following a warning, according to legal documents.

Volkswagen faces the possibility of $2.8 billion in penalties, making this the largest import tax demand in India's history. The case, described by Volkswagen as "life and death," could impact investor confidence amid prolonged legal disputes.

The court is soon to rule on Volkswagen's challenge to the tax demand, with the company claiming evaluation delays were due to missing documents, while authorities insist the law must be upheld.

(With inputs from agencies.)