The “issue regarding misclassification is an interpretational issue”, Kia said in a statement.New Delhi: Whenever on Friday said it is contesting an Indian tax demand of USD 14 million for wrongly using free trade agreements to claim lower tariffs on some electronic car part imports, the latest tax tussle between the South Korean automaker and New Delhi.
Tax investigations in India can drag on for years and are often a sore point for foreign companies. Kia is separately fighting a USD 155 million tax evasion notice, and Volkswagen has sued New Delhi against a record USD 1.4 billion demand it calls “impossibly enormous.”
Kia commented on Friday for the first time on the Indian authorities’ 2023 confidential notice, which is not public but was reviewed by Reuters. It alleges that Kia imported some electronic parts but “wrongly” claimed benefits of lower duties which did not apply to those components under India’s free trade agreements with Korea and ASEAN nations.
The “issue regarding misclassification is an interpretational issue”, Kia said in a statement, adding the company has submitted a detailed response to the tax authorities who are still reviewing the matter.
