Quashing Volkswagen's $1.4 billion tax bill can be 'catastrophic,' Customs dept says

According to the Customs department, granting Volkswagen's request to halt its $1.4 billion tax payment would have "catastrophic consequences," which would incentivize businesses to conceal information and postpone investigations.

According to a report by news agency Reuters, the main defense put out by German automaker Volkswagen to thwart the tax demand is the "inaction and tardiness" of tax officials in postponing shipping reviews. The corporation has referred to the 12-year examination of Volkswagen exports as a "matter of life and death" for its India business, as it led to the highest-ever demand for import duty back taxes in India.

This is because Skoda car Volkswagen India, a Volkswagen subsidiary, is currently being accused of importing car parts in separate shipments over a number of years in order to avoid discovery and save taxes rather than declaring items as "completely knocked down" (CKD) units to be reassembled in India.