Latest tax target: companies selling below cost
Mumbai: Indian tax officials have opened up a new front in their battle to increase revenue collected from companies, targeting manufacturing firms that slash prices below cost in order to sell slow-moving inventory.
Car makers in particular, mostly multinationals, are in the spotlight, several tax officials and industry executives said.
Authorities are investigating whether the local units of General Motors Co., Suzuki Motor Corp, Honda Motor Co, Ford Motor Co and Daimler’s Mercedes-Benz sold cars at a loss, thereby paying lower excise duty.
Excise duty is due on almost all goods manufactured in India and is levied on the assessed value -- usually the price at which the item is sold.
General Motors and Ford said they were cooperating with the tax authorities. Mercedes-Benz and the Indian subsidiaries of Honda and Suzuki declined to comment.
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