After Volkswagen received a $1.4 billion tax notice from Indian authorities for unethically saving taxes, Kia India also got a $14 million tax notice for using a similar strategy and hoodwinking Indian authorities for saving taxes.
Kia (a South Korean car maker) came to India in 2019 and set up a manufacturing unit in Andhra Pradesh. Since then, it has sold more than a million cars in India.
As per Reuters, Kia India received a 432-page notice for unethically saving taxes, mostly for its Carnival minivan model. They have also imported all the cars into separate lots to save taxes. Importing for parts attracts 5-15% taxes while the whole car attracts 30-35% taxes.
Indian authorities have also mentioned that Kia India was using a free trade agreement deal with South Korea wrongly to get lower tariff benefits for some electronic parts imports.
As per the Reuters report, Kia India has already deposited $4 million with the authorities while the matter is heard.
The government of India must take this matter seriously and make strict and clear policies to give a strict message to foreign companies who are involved in these unethical practices and hoodwinking India authorities.