Kia on Friday said it is contesting an Indian tax demand of $14 million for wrongly using free trade agreements to claim lower tariffs on some electronic car part imports, the latest tax tussle between the South Korean automaker and New Delhi.

Indian tax authorities have sent a confidential notice to South Korean car maker Kia Motors accusing it of evading millions of dollars in taxes.The amount could be as high as $155m (£125m) and the notice was sent in April last year,

India has accused South Korea’s Kia of evading taxes of $155 million (Rs 1356 crore) by misclassifying component imports but the carmaker has denied wrongdoing, the latest fight by a foreign automaker with New Delhi over tariffs, according to a document and two sources.

Weeks after German luxury car maker Volkswagen slapped a lawsuit against the government of India over a $1.4 billion tax evasion notice, KIA faces GOI’s sweet chin music for allegedly evading $155 million in taxes. Will the South Korean car maker take the same legal recourse as the Skoda maker?

Kia India faces tax demand notice over component imports, denies wrongdoing, and files detailed response with authorities.

During 2022, an investigation into car companies such as Volkswagen and Kia for allegedly evading India’s customs duties while importing components needed to assemble cars, started nearly three years ago.

Indian tax authorities issued a notice to Kia’s Indian unit, stating the company incorrectly declared imported parts for assembling its Carnival minivan. The notice, according to a Reuters report, alleges Kia separated shipments to reduce customs duties.

Kia competes with Hyundai and Maruti Suzuki in the world's third-largest auto market, where it has a share of 6% of roughly 4 million units a year, and its Kia Seltos and Sonet SUVs are among the top sellers.

South Korean automaker, Kia, is disputing a $14 million tax demand from Indian authorities, the company revealed on Friday. The tax demand alleges that Kia wrongly claimed lower tariffs on certain electronic car part imports,

India has accused South Korean carmaker, Kia of evading taxes of $155 million by missclassifying component imports, reported Reuters quoting a document and two sources. The latest conflict comes in a series of such rifts between a foreign automaker with New Delhi over tariffs.