Fiat India, the wholly owned subsidiary of the Italian automobile major has been asked by the Supreme Court of India to pay almost Rs 400 crore as excise duty in relation to the company’s imports into India in 1996. The company was operating in collaboration with Premier Automobiles at the time and CKD (complete knock down) units of the Uno hatchback were imported into India and sold at prices below their cost price.
The excise duty being charged is the duty on the manufacturing cost of the Uno hatchbacks in India from the year 1996 to 2001. According to the tax authorities, the auto company is said to have sold the cars at a price lower than the cost price in order to penetrate the Indian automobile market. Fiat’s partner Premier Auto is also expected to pay up an amount of Rs 49 crore.
The ruling by the apex court held that the excise duty being paid is based on the cost of the product and not its selling price.