BMW likely to get Rs 650cr showcause notice from I-T dept

German car-maker BMW is likely to get a Rs 650 crore show-cause notice from the Indian IT department. CNBC-TV18 learns that the company has been served with the tax notice by the Department of Revenue Intelligence and the Customs Department, Chennai after it found the luxury car maker guilty of evading customs duty.

Sources say the tax authorities are going to send BMW a show cause notice for Rs 650 crore within the next two weeks.
The tax department has found that BMW was importing semi knocked down (SKD) units of cars, as the against its claims for importing completely knocked down (CKD) units. 
The duty for SKD units is at a rate of 30 percent, while CKD units at the rate of 10 percent.
The duty on CKD units is lower because there is no value addition within the country. Hence, the customs department charges a 10 percent duty. However, when cars are pre-assembled it’s a higher duty of 30 percent.
BMW, in response to a CNBC-TV18 query, said that inspections are on at their Chennai plant. It is fully cooperating with the tax department.
Sources say in the next two weeks the tax man is likely to send showcause notice.