[sf71hvettel]

Originally Posted by SunaPana

Attachment 2722992

Kia has sold less than 15k old Carnival don't think it accounts for 155 million

Even I assumed that total Carnival sales would not excees 155 Mn USD, but this is what my back of the envelope calcuation shows



This does not account for dealer margin and is of course a very rough calculation, but their total turnover for Carnival would be somewhere close to 461 Mn USD.

[Turbanator]

Some more details, including a deposit by Kia. This would be the mandatory deposit to file an appeal. VW probably has taken up directly to the courts as this deposit will be too large.

I don't recollect if the manufacturer lists or advertises their models as CKD anywhere. Also, it will be interesting to know if the custom tariffs mention specifically anywhere that these parts are not for new car purchase! As otherwise, manufacturers have probably full right to import parts at lower rates irrespective of the end use. If they gave an undertaking to customs of the end use being spares, then they are in a fix. But I'm sure, they would have worded differently. It's not unusual for customs to ask for the end use from the importer.


Two sources said Kia's (000270.KS), opens new tab case was similar to that of Volkswagen, accused of evading a higher tax of 30% to 35% applicable on parts imported in "completely knocked down" or CKD form in a single shipment, instead shipping separate parts over days, making them eligible for a tax rate of just 10% to 15%.

During the investigation, Kia's website showed the Carnival model sold in India as being in "CKD" form, with retail sales of 9,887 units between 2020 and 2022, the tax notice said.
The Volkswagen investigation spanned 14 car models from the Skoda Kodiaq to the Audi A3 and the Volkswagen Tiguan.


Kia has deposited 2.78 billion rupees ($32 million) "under protest" as it continues to fight the Indian tax notice, which is still proceeding, said a government source who declined to be named as the matter is private.

https://www.reuters.com/business/aut...te-2025-02-05/

[PreludeSH]

Maybe its time to have only two taxes. One for parts and one for CBU? Make it simple.

[ike]

Originally Posted by SunaPana

Has Kia even sold 155 million worth of Carnival in India.

That doesn't matter. The demand would be for the duties IT presumes were evaded plus penalties and interest. This will easily be at least double of what was assessed as evasion.

[Naetik30]

Calm down folks. Just another fishing expedition by the department.

Couple of officers will enter the good books of the right people.

Some babus will turn millionaires.

All of this adds to the GDP growth of our country, as this wealth will be spent in India eventually, as long as they dont spend on a foreign trip.

[ZenMaster]

Looks like somebody at the higher level is not getting their palms greased enough by some auto companies.

[doga]

Why are we blaming the taxman? They'd much like to just warm the chair and twiddle thumbs like most sarkari departments.
It's the GOI which is pushing for whatever they can grab. Recent announcements of PSU investments and all those schemes which fetched votes now need funding.
Expect increased scrutiny of year's old IT returns now.

Every rupee counts!

[handsofsteel]

Based on my limited understanding of this case, I am with the government on this one. As a member of the salaried class, I wonder why the hue and cry for a manoeuvre blatantly designed to evade/ minimise taxes by exploiting loopholes. Agreed it’s a profit driven economy and every singly loophole will be found and exploited (fair enough, they were laughing their way to the bank so far). Ease of doing business doesn't mean knowingly/ unknowingly cocking a snook at the laws of the land. I agree heads will roll and maybe somebody will exit the country but so be it. I understand this is an auto forum but surely this is misplaced sympathy? I do agree that : -

1. Delay in catching this evasion is solely the authority's and therefore the amount of 'interest component' may not stand legal scrutiny.

2. The figure would be eye-catchingly large and ultimately be pared down post negotiations/ quid pro quo.

3. Any ambiguity in the letter of the law can always be argued before a court (Vodafone did take the GoI to court, for a different reason though, and win its case there).

While it is always 'innocent till proven guilty', given VW's track record, I am not too optimistic.

[Raghu M]

I am surprised that the forum thinks GOI is at fault here. Just because we are auto lovers doesn't mean a move like this by the government is not correct. We have to wait for the details to come out, Kia can go to the court of law if there is anything unfair here. The problem is, we just react to an article. Some people writing that certain officials have not been greased properly is outright slander. I don't think there are enough details on the table to take sides here. Not all automakers are true to the business, everyone tries to circumvent rules and even evade tax. I am sure everyone remembers the Dieselgate fiasco.

[@ppy.tbhp]

I’m honestly surprised to see how many of us are defending either side without waiting for all the facts. We should be asking tougher questions here. Blind trust—whether it’s in an automaker or a government authority—helps no one. What we really need is transparency and accountability from everyone involved.

As a Kia owner, I can speak from personal experience—things have gone downhill fast. Spare parts availability is terrible for even new vehicles, and the most troubling issue is the widespread design and manufacturing defect in front light assemblies across most Kia vehicles in India. Here’s the shocking part: It looks like Kia has pulled a move similar to Diesel gate. They’ve introduced low-cost desiccant pads inside all front light assemblies as a temporary fix to pass regulatory and quality tests. These pads mask the defect just long enough to pass inspections, but in real-world conditions, they fail quickly, leaving owners with permanently damaged front light assemblies reducing their light output on road.

The result? Severely reduced visibility on the road in real world normal driving conditions, especially in rainy night normal driving conditions, which is a serious safety hazard for both drivers and other road users in India. And here’s the kicker—these desiccant pads require frequent replacement, but Kia’s authorized service centers almost never have them in stock when required. The cost and time involved in replacing the permanently damaged front light assemblies is very high. Kia is leaving me and many other affected vehicle owners with no choice but to drive defective vehicles with critical safety hazards without fixing the manufacturing defect permanently at once.

This isn’t just poor after-sales service—it’s deliberate wrongdoing by Kia India. Cutting corners like this is not only a blatant violation of regulatory standards but also a direct threat to road safety. Kia is failing its customers and disregarding basic legal and safety compliance, all while charging us a premium for substandard products. It’s clear at this point that Kia India is indulging in cheating and shady business practices. They’re blatantly disregarding customer safety and satisfaction—things they are legally required to uphold under India’s regulatory and consumer protection laws. This isn’t just bad service, it’s outright negligence and deception.

As Indian consumers, we need to raise our voices and demand corrective and preventive actions at the earliest. It’s no longer just about inconvenience—it’s about holding Kia accountable for putting profits over customer satisfaction and safety for all road users. If we don’t push for transparency and accountability, we’re only enabling more of the same.

[wheelspinner]

Let's give an unbiased opinion. BHPians, would you be comfortable buying cars from a manufacturer that is carrying out shady tactics (likely illegal, and hence the penalty) to save on taxes? It just depicts the extent to which such manufacturer can go to drive up sales, and profits. This is unnecessary risk taking by Kia India team if they wanted to save taxes.

I don't believe that the IT department opens a case without solid evidence.

[Sisu]

Based on my experience, tax laws are poorly drafted (deliberately?) leaving room for interpretation issues.

Revenue department's track record of winning in courts is less than 15%. This points to a simple fact that most of the investigations and demands raised are not sound as per law.

I can understand the average working class person having full sympathy and support towards the Tax department that they are clamping down on tax evasion, but in most of the cases it is the Taxmen who are driving a personal agenda for monetary or other positional gains.

In today's time, any decently big corporate has focus on corporate governance and a full fledged compliance/risk mitigation team which analyse the point out any non compliance to all laws of the land including tax laws. The business decisions pertaining to tax compliance are seldom based on an individual persons decision but are in fact backed by legal opinions from Tier-A law firms.

A Diesel-gate like situation is rarest of the rare occurrence.

In this current case, since the tax demand is raised in Volkswagen and Kia companies (more will likely follow), it seems to be an interpretation / drafting issue rather than a celebrate attempt to evade taxes by the whole auto industry.

On a sidenote, the political class in this case doesn't seem to look into a particular investigation and take a call on such tax demands as proactively as it should. This results in taxmen having a free reign and raising frivolous tax demand and carrying out lengthy tax investigations without having any accountability to be reprimanded in case the demands not being confirmed by the courts.

I feel the politicians should play a more active role in defending the interests of private industry and taxpayers as they are the most vulnerable under such over enthusiastic, revenue hungry taxmen.