Govt Accuses Kia of Evading $155 Mn Taxes

The car maker denies tax evasion claims linked to Carnival model imports

- Reuters

India has accused South Korea's Kia of evading taxes of $155 million by misclassifying component imports, but the carmaker has denied wrongdoing. This is the latest fight by a foreign automaker with New Delhi over tariffs, according to a document and two sources.

Kia competes with Hyundai and Maruti Suzuki in the world's third-largest auto market, where it has a 6% share of roughly four million units a year, and its Kia Seltos and Sonet SUVs are among the top sellers.

Foreign companies in India face headaches from high taxes and long-drawn-out investigations. For example, Tesla has publicly complained about high taxes on imported EVs, and last week, Volkswagen sued over a demand for a record $1.4 billion in back taxes that it called "impossibly enormous."

Tax officers sent a confidential notice to Kia's Indian unit in April 2024, flagging ₹1,350 crore alleged tax evasion, according to a government notice Reuters is reporting for the first time.