Chinese EV manufacturer BYD under probe for tax evasion on imported partstext_fields
New Delhi: BYD, a leading Chinese company that manufactures electric vehicles, is under investigation for underpaid taxes on imported automobile parts, which are assembled in India.
According to sources, the Directorate of Revenue Intelligence (DRI) has claimed that BYD underpaid $9 million in taxes. The company had underpaid taxes on the materials it imported into India for assembly and sale.
As a result of the DRI's findings of tax evasion, the company has now paid the amount that was due.
Ongoing investigations could potentially reveal other tax loopholes used by the company.
The Chinese automobile giant was previously under government scrutiny for its billion-dollar proposal due to policies imposing restrictions on investments from bordering nations.
The proposal to manufacture electric vehicles in India aims to counteract the high import duty rates ranging from 70% to 100%.
Importing parts of these electric vehicles is taxed only at rates of 15% to 30%, provided that motors and battery parts are not imported as parts attached to the vehicle chassis. BYD is alleged to have failed to fulfil this condition, as a result of which it is now liable to pay 70-100% of tax depending on the vehicle's value.
BYD has invested over $200 million in India and currently has two models in the market: the Atto 3 electric SUV and the e6 EV for corporate fleets. The company has ambitious plans to launch its Seal Electric Sedan later this year.
Since commencing sales operations in the Indian market in 2022, BYD has sold a total of 1,960 vehicles in India.