Volkswagen has filed a legal petition in India contesting a US$1.4 billion tax demand from Indian authorities.

The company argues that the claim contradicts import taxation rules for car parts and will be heard by the High Court in Mumbai on Feb. 5.

Skoda Auto Volkswagen India, a subsidiary of the automaker, maintains that its practice of importing unassembled car components was clarified by the government in 2011.

This clarification supports its strategy of importing parts instead of complete vehicles.

In contrast, Indian authorities allege that Volkswagen misclassified complete car imports as separate parts to evade higher duties.

This misclassification resulted in reduced tax payments of 5-15% rather than the 30-35% applicable to completely knocked-down (CKD) kits.

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