Skoda agrees to pre-deposit Rs 30 Cr

Honoring the decision of the Supreme Court, Skoda India will settle the pre-deposit dues within four weeks, said sources. Notably, the Supreme Court of India had directed Skoda India to pay Rs 30 crore as pre-deposit and after the deposit the proceedings on the decision on the duty of Rs194 cr imposed on Skoda would initiate.

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According to media reports a double bench comprising justices DK Jain and HL Dattu heard the plea filed by the Czech auto giant Skoda in which it had challenged the decision of the tax tribunal. In its decision, the bench had turned down Skoda’s plea however it extended the period to settle the pre-deposit by four weeks.

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According to reports, Skoda India made a payment of 45 million dollars in the name of technology transfer agreement which was in fact found by the Customs Department to be the part of the value of 45,000 kits supplied to Skoda India. Sensing it an attempt to evade tax, the Customs department slapped a duty of Rs 97.15 crore and an equivalent amount of penalty on Skoda India.

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In due course, Volkswagen subsidiary Skoda challenged the decision of the Customs Department in the Customs Excise and Service Tax Appellate Tribunal that also upheld the decision and asked Skoda to clear the dues. Later, Skoda India challenged it in the Supreme Court that also asked the auto major to pay the pre-deposit amount.

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Skoda India currently has a plant in Auranagabad where it assembles the car kits it imports from its parent firm. In India since 2001, Skoda entered with its Skoda Octavia and it sells car models including the most sought after hatchback Skoda Fabia that is fast becoming a close rival of other hatchbacks in its segment, the sedan range Skoda Laura and luxurious Skoda Superb, and the fast catching SUV Skoda Yeti.

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