JSW Group Demands Volkswagen Pay $1.4 Billion Tax Bill

JSW Group is demanding that Volkswagen AG resolve a $1.4 billion tax liability as a prerequisite for proceeding with a planned joint venture in India. The dispute stems from allegations by the Indian government that Volkswagen misclassified vehicle assembly kits imported between 2012 and 2024 to reduce tax levies.

While the two companies have reached a preliminary agreement on commercial terms and the structure of the partnership, JSW has indicated it will not assume the financial burden of the tax claim. Volkswagen is currently challenging the demand in a Mumbai court. The proposed partnership aims to develop and market passenger vehicles, including hybrid and electric models, for both the Indian domestic market and export.

Negotiations have slowed further following the sudden departure of Skoda CEO Klaus Zellmer, who left to join Volvo Car AB. The companies had previously targeted December for the signing of a binding agreement, but the tax dispute and leadership changes have stalled the timeline.