BMW India faces Rs 650 crore blow from customs department

The CBEC is likely to serve a Rs 650-crore show-cause notice to luxury car maker BMW alleging that it imported semi-knocked down cars but paid duty for completely-knocked down car units.

"The Central Board of Excise and Customs (CEBC) Chennai office will serve Rs 650 crore show-cause notice to BMW," a Finance Ministry official said.

"The department believes that BMW imported semi-knocked down (SKD) cars but paid duty for completely-knocked down (CKD) cars. The company will be served notice shortly," the official added.

The customs duties on SKD and CKD are 30 per cent and 10 per cent, respectively.

When contacted for comment, BMW India spokesperson said, "An inspection is in process by the authorities at BMW plant in Chennai. We are co-operating with the authorities in the inspection process."