Volkswagen sues India to quash ‘enormous’ $1.4 bln tax demand, legal filing shows

Reuters was first to report that Volkswagen has sued Indian authorities to quash an “impossibly enormous” tax demand of $1.4 billion, arguing the ask is contradictory to New Delhi’s import taxation rules for car parts and will hamper the company’s business plans. Volkswagen’s India unit also told a court the tax dispute puts at risk its investments of $1.5 billion in India and is detrimental to the foreign investment climate in the country.

Why it matters

The tax dispute comes at a time when Volkswagen is battling to cut costs to better compete with Chinese rivals and cope with weak demand in Europe. In December it announced 35,000 future job cuts in Germany. In its biggest market, China, the carmaker has said it will sell some of its operations.