Chinese Carmaker BYD Undergoes Tax Probe by DRI, According to Report

Chinese automaker BYD is currently under investigation by the Directorate of Revenue Intelligence (DRI) for alleged tax evasion related to imported car parts used in their vehicles assembled and sold in India, as reported by Reuters. The DRI claims that BYD owes around Rs 730 million ($9 million) in unpaid taxes.

Although BYD has reportedly made partial payments after the DRI's preliminary findings, an additional probe has been initiated to assess potential tax charges and penalties. While the DRI is yet to issue a final notice to BYD, the automaker retains the option to contest the findings.

Interestingly, last month, BYD Motors' proposal to establish a $1 billion four-wheeler manufacturing facility in India alongside partner Megha Engineering and Infrastructures Ltd was rejected by the Indian government. The plan involved setting up an electric vehicle plant in Hyderabad, with Megha providing the capital and BYD contributing technological expertise.

Presently, BYD maintains a presence in India, primarily selling the Atto 3 electric SUV and the e6 electric sedan to corporate fleets. Additionally, Megha Engineering's unit, Olectra Greentech, has collaborated with BYD to develop two electric buses.

The Indian government revised its foreign direct investment policy in April 2020, requiring approval from the Indian authorities for companies from neighboring countries seeking to invest in Indian firms. This move was aimed at scrutinizing and potentially restricting acquisitions by Chinese companies in the aftermath of the Covid-19 pandemic, though the policy does not explicitly mention any specific country.