“Regarding the current matter, we have filed a detailed response, supported by evidence and documentation to substantiate our stand. However, as the issue is currently under consideration of the relevant authorities, we won’t be able to comment further or provide additional details on the matter as of now,” said Kia India.
A 432-page notice, accessed by Reuters, states Kia imported Carnival car parts separately through multiple ports to lower customs duties. The notice, sent in April 2024, said that this method prevented detection by customs authorities.
Kia has reportedly deposited $32 million “under protest” as it continues to fight the Indian tax notice, which is still proceeding. In 2022, authorities searched Kia offices and a factory in Andhra Pradesh and took statements from its executives.
During the investigation, Kia executives “changed their stance and have made efforts to mislead,” the tax notice stated, referring to statements on imports, manufacturing and taxation, said the Reuters report. Kia is accused of importing more than 90% of the parts for Carnival, constituting a car in CKD form, which attracts higher tax, it added.
Besides Kia, the government has issued a notice to the German auto giant Volkswagen for evading $1.4 billion in taxes by paying lesser import tax on components for its Audi, VW and Skoda cars.
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