The German luxury automaker BMW is under Investigation by the tax authorities of India in order to confirm whether BMW has paid all the customs duty for all the automobile parts imported since March-2011 as reported by Economic Times. BMW India’s spokesman confirmed that investigations by tax authority took place by saying that “an inspection is in process by the authorities at the BMW plant in Chennai. We are co-operating with the authorities in the inspection process”.
As per Tax Authorities of India, BMW was continuously importing automobile parts such as engine, gearbox and transmissions which would initially be in their pre-assembled format (semi-knocked down state) and would get assembled at the BMW cars facility on the outskirts of Chennai. BMW has already paid 10 percent duty claiming its imports were under the ‘completely knocked down’ format which in reality was in semi-knocked down state.
Due to this reason Tax authorities investigated BMW and are likely to slap Rs 650 crore duty evasion notice since the company had to pay 30 percent customs duty for its automobile parts being in semi-knocked down state.
According to The Wall Street Journal, the authorities have seized a shipment of BMW engines and transmission equipment valued at Rs 250 crore. BMW could be hit with a tax claim ranging between Rs 500 to 650 crore as the duties on SKD kits is levied at 30 %, while taxes for CKD kits is levied at 10 %.