Chinese automaker BYD is X-Deal (2011)under investigation in India for allegedly underpaying taxes on imported car parts used in the assembly of vehicles sold in the country, Reuters reported on August 2. The investigation, conducted by India’s Directorate of Revenue Intelligence (DRI), claims that BYD has underpaid taxes by 730 million rupees ($9 million). Although BYD has already paid this sum following the DRI’s preliminary findings, the investigation is still ongoing, and there is a possibility of additional tax charges and penalties, sources told Reuters. The DRI has not yet issued a final notice to BYD, and the company has the option to challenge the findings. Fully built electric cars imported to India are taxed at 70% or 100% based on the vehicle’s value, while imported car parts assembled locally into an EV are taxed at 15% or 35%. However, those lower rates are only applicable when parts such as a battery pack or motor are imported without being mounted on a vehicle chassis, according to Reuters‘ report. One source said that BYD had not met these conditions, making it liable to pay either 70% or 100% depending on the value of the car. Currently, the exact time frame of the alleged violation and the number of affected cars are unclear. [Reuters]
