The Supreme Court of India on Wednesday ordered the Indian unit of the leading Italian car maker Fiat to pay close to Rs 400 crore as excise duty. With this order, the Supreme Court has set aside a tribunal order and upheld the claim of the tax department.
In year 1996, Fiat India was operating in joint venture with the Premier automobiles. At that time, the company was importing Completely Knocked down (CKD) units of that time’s popular Uno model in the country. Interestingly, the company was selling this car at much lesser price as compared to the cost price of the car.
The excise duty levied by the tax authority of India had imposed the excise duty on these cars at their cost price; however, Fiat India had contested the charge of excise department of paying excise duty on cost price. The case was of tax levied on these cars sold in the period of year 1996 to 2001.
As per the order of apex court, the erstwhile partner of Fiat India – Premier Auto – would be paying Rs 49 crore to the tax department.
