In the latest turn of events, KIA, the third-largest car manufacturing company in the world, is slammed with evading taxes worth $155 million by misclassifying imported components in India. However, the carmaker has denied any wrongdoing.
But this is not the only case with KIA. Foreign companies in India have high tax rates and long investigations. For instance, Tesla has openly criticised the high taxes on imported EVs. At the same time, Volkswagen filed a lawsuit last week against the government over a staggering $1.4 billion back tax demand, calling it “impossibly enormous”.
Tax Notice
In April 2024, tax officials issued a confidential notice to Kia’s Indian unit, alleging a tax evasion of ₹13.5 billion, according to a government notice reported by Reuters for the first time. The case revolves around the misdeclaration of imported components used in assembling the carmaker’s luxury Carnival minivan.
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In the 432-page notice, the government stated it found that the “car model was being imported in parts or components in separate lots” via different ports with the “intent to discharge lesser customs duty.”
