BMW India is seeking the assistance of the German government in dealing with a Rs 650-crore duty evasion case slapped on it by tax authorities, a top company official said.
"The German ambassador is supporting us in this," BMW India president Philipp von Sahr told TOI here when asked to comment on the development. "They try to support us to have stable business conditions." The Chennai office of Central Board of Excise and Customs is understood to have slapped the Rs 650-crore show-cause notice on the luxury car maker, alleging that it imported semi-knocked down (SKD) cars but paid a lower duty that is reserved for completely-knocked down (CKD) car units. Philipp von Sahr, however, denied any wrongdoing on the part of the company in its business dealings. "It is wrong to presume any such thing. There has been no violation on the part of BMW."
The customs duty on SKD and CKD are 30% and 10%, respectively. As per CBEC, the company made undue gains by passing SKD kits as CKD. The tax authorities had also carried out an inspection at the company's facility in Chennai. BMW had also confirmed the development, "An inspection is in process by the authorities at BMW Plant in Chennai. We are co-operating with the authorities in the inspection process," it had said in May. von Sahr said the company is actively looking into the matter.
BMW India is a fully-owned subsidiary of Germany's BMW Group. The company entered the Indian market in 2007, and is increasing its total investment in the country from Rs 180 crore to Rs 390 crore by the end of this year. The company is increasing the capacity at its assembly plant to 14,000 units annually by the end of this year from the existing 11,000. It currently assembles models like the 1-Series, 3-Series, 5-Series, X1 and X3 in India.