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Tax authorities search BMW's Chennai unit
The Chennai office of luxury carmaker BMW was searched by the tax authorities who suspect that the German company has evaded about Rs 500 crore in duties, people with knowledge of the development said.
Officials of the Department of Revenue Intelligence and Customs are jointly investigating BMW, the sources said.
A spokesman for the company said that "an inspection is in process by the authorities at BMW plant Chennai. We are cooperating with the authorities in the inspection process."
The searches are taking place in the backdrop of increased scrutiny of tax practices by multinationals operating in India. In recent months, Nokia and Shell have been served with tax bills for not following Indian laws. They have contested the orders.
The searches have been taking place over the last few days and tax authorities believe BMW was importing parts like engines, gearboxes and transmissions in a pre-assembled format without paying the required duty of 30%.
The company has been showing in its books that these parts are non-preassembled parts, or completely knocked down units, and has been paying only 10% duty, according to a source.
India is a major market for the German carmaker and it has a market share of 12% in the luxury car segment. Till date, the company has infused around 60 million euro (Rs 420 crore) in India.
The 40-acre Chennai plant at Mahindra World City makes the BMW 3 series, 5 series, BMW X1, BMW X3 and BMW MINI.
Tax authorities search BMW's Chennai unit - Economic Times
The Chennai office of luxury carmaker BMW was searched by the tax authorities who suspect that the German company has evaded about Rs 500 crore in duties, people with knowledge of the development said.
Officials of the Department of Revenue Intelligence and Customs are jointly investigating BMW, the sources said.
A spokesman for the company said that "an inspection is in process by the authorities at BMW plant Chennai. We are cooperating with the authorities in the inspection process."
The searches are taking place in the backdrop of increased scrutiny of tax practices by multinationals operating in India. In recent months, Nokia and Shell have been served with tax bills for not following Indian laws. They have contested the orders.
The searches have been taking place over the last few days and tax authorities believe BMW was importing parts like engines, gearboxes and transmissions in a pre-assembled format without paying the required duty of 30%.
The company has been showing in its books that these parts are non-preassembled parts, or completely knocked down units, and has been paying only 10% duty, according to a source.
India is a major market for the German carmaker and it has a market share of 12% in the luxury car segment. Till date, the company has infused around 60 million euro (Rs 420 crore) in India.
The 40-acre Chennai plant at Mahindra World City makes the BMW 3 series, 5 series, BMW X1, BMW X3 and BMW MINI.
Tax authorities search BMW's Chennai unit - Economic Times
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