Kia's Indian subsidiary has been accused of failing to pay taxes amounting to billions of won due to misclassification of automotive import parts, leading to a report by Reuters on the 5th.
According to Reuters, local tax authorities sent a confidential notice of over 430 pages to Kia's Indian subsidiary last April. The notice indicates that Kia's Indian subsidiary is under suspicion of misreporting the import parts for the assembly of its premium minivan Carnival, resulting in evasion of a total of $155 million (approximately 224 billion won) in taxes applicable at rates of 30 to 50%.
Kia's Indian subsidiary is currently in legal dispute over this matter, and if it loses, it could face liabilities of up to $310 million (448 billion won). Kia's Indian subsidiary noted that it is "continuously consulting with the local authorities" and has responded with comprehensive evidence supporting its position, according to Reuters.
Kia competes with corporations such as Hyundai and Maruti Suzuki in India, the third-largest automotive market in the world. However, foreign corporations operating in India are reportedly facing challenges due to high taxes and prolonged tax evasion investigations.