Summarize this content to 2000 words in 6 paragraphs in Arabic Good morning. Today’s newsletter is about two legal cases that have significant business ramifications. In Bengaluru, X is suing the government over what it has called a “censorship” portal. And in Mumbai, Volkswagen is challenging the whopping $1.4bn tax bill it got. We also have a very special “My mantra” today from a five-time world chess champion. Let’s dive in.Taxing times The bogeyman of retrospective taxation has returned, with Indian authorities demanding Volkswagen pay $1.4bn in taxes. Last week, legal representatives of the customs department told the Mumbai high court that quashing the proceedings in the case would have “catastrophic consequences” (the case is not short on hyperbole. While seeking a legal challenge to the tax bill, the German carmaker had said this was a “matter of life and death”). Here’s the back story: the customs department claimed that its probe revealed Volkswagen’s Indian unit was allegedly importing complete knocked-down kits of cars, which would then be assembled in India, and wrongly labelling them as spare parts, which are taxed at lower rates. These practices go back to 2012, according to officials, and led to the company paying only $981mn in duties, as opposed to $2.35bn.Volkswagen has reportedly asserted in court filings that the “inaction and tardiness” of tax officials led to delays in shipment reviews. But the customs department said last week that the delays were caused by Volkswagen withholding information and data about its imports. If the case were to be thrown out on these grounds, it would encourage other companies to withhold information too and employ delaying tactics to eventually pay lower duties, the department added.The case is reminiscent of Vodafone’s long battle with Indian authorities, which has become the poster child to illustrate India’s unreasonable retrospective tax demands. That case, about a 2007 deal between the telecoms group and Hutchison, wound its way through several courts before an international tribunal in The Hague ruled in the company’s favour in 2020. In trying to get the Mumbai court to quash the case, Volkswagen was probably hoping to avoid the similar fate of a long legal battle. The Volkswagen case comes at a crucial time, when the Indian government is actively trying to get multinationals to invest in manufacturing in the country. Lengthy investigations by various government departments are not the best conditions for business. In India, disputed tax bills have amounted to nearly $186bn in the past two decades. While it is important that the government not lose any revenue, bureaucratic red tape, process delays and unreasonable penalties are detrimental practices. Often, the process itself is the punishment. It is clear that the government recognises these issues. In November, it mandated that customs investigations should conclude within a year, but it did not bring existing investigations, such as Volkswagen’s, under this umbrella. And in her February budget speech, finance minister Nirmala Sitharaman proposed changes aimed at cutting regulatory burdens, including simplifying international transactions and expanding safe harbour rules. Global headline-grabbing news, such as the current litigation with Volkswagen, will have a damaging effect when companies assess setting up or expanding their Indian operations. The line between tax efficiency and tax “terrorism” is not very thin. It should be easy to stay on the right side of it.Recommended storiesUS stocks and the dollar have fallen in tandem in recent weeks as uncertainty and Donald Trump’s policies dent the economic outlook. Although the greenback remains crucial in reserves and payments, how long will it continue to be the king of currencies?German software giant SAP has overtaken Danish drugmaker Novo Nordisk to become Europe’s most valuable company.Buyers’ remorse? Republican voters in Utah are aghast as Elon Musk’s Doge cuts take their jobs away.Luxury car sales in Singapore have plummeted as buyers shun ostentatious displays of wealth, with the government stepping up due diligence checks after a $2bn money-laundering scandal.Is it OK to use AI to psychologically profile your date? FT columnist Jemima Kelly shares her experience.From Hong Kong to Zurich, here are FT readers’ favourite airport lounges.On censorship, X asks whyAfter appointing himself the champion of free speech (even if he doesn’t always act as such), Elon Musk’s X is going after the Indian government’s proclivity for blocking online content. X has now filed a case alleging that the government is putting a parallel mechanism in place in order to circumvent the legal provisions laid out in the Information Technology Act. According to the original rule, only the ministry of electronics and information technology could approve requests for blocking content on websites. However, the government has now introduced a new provision, under which various officials and police officers can issue information blocking orders. These are done through a government-run portal called Sahyog (or “co-operation” in Hindi). X is a rare holdout that has refused to join this portal, while Meta, Telegram, Apple, Amazon and 34 others have already complied. X has called Sahyog a “censorship portal”, arguing that unlike the old provision, the new one does not have many procedural safeguards to prevent misuse. The government’s position is that orders sent through the portal are merely to inform social media platforms about “illegal” content. But if the content is not taken down, the platforms share the same liability as the person who posted the content. So far, social media companies have managed to limit their liability for the content on their sites by claiming a distinction between a “platform” and a “publisher”. In the new law, once content is flagged in the portal, that distinction becomes less relevant. X’s concerns are understandable, especially after it has done away with its content moderation policies. Any number of posts can be tagged as offensive and the portal will have to constantly play a game of whack-a-mole. The Indian government loves free speech but only as long as it is complimentary. It is easy for users and platforms to get into its crosshairs. X’s case against the government also comes at a time when Musk’s other businesses are seeking entry into the Indian market. Of course, dealing with the billionaire now also means dealing with the US, to an extent. That X has gone ahead with the suit suggests Trump’s White House, in which Musk is playing a major role, probably has the upper hand in India-US trade relationships currently. We’ll get a better sense after the next hearing for the case, on Thursday.Go figureA new study found that more than half of the world’s most populated cities are getting wetter, as climate change intensifies and water patterns undergo dramatic shifts in urban areas. My mantra“On productivity — I would say, if you can really give the importance necessary to sleep and sleep well, that’s by far the most effective thing I know.”Viswanathan Anand, five-time world chess championEach week, we invite a successful Indian to tell us their mantra for work and life. Want to know what your boss is thinking? Nominate them by replying to indiabrief@ft.com Quick questionIndian tech stocks have taken a big beating. What is your strategy? Tell us your reasons at indiabrief@ft.com Buzzer roundOn Friday we asked: What touched an 800,000-year high in 2024, illustrating the alarming impact of climate change?The answer is . . . carbon dioxide levels in the atmosphere (shudder!) Aniruddha Dutta is, once again, the man to beat. His answer came in first, followed by Asuwath Kumar J and Agasthya Vivek.A note here to say that my LinkedIn game is appallingly bad, I rarely log in. I notice a lot of you write in to me there, but if you want a quick(er) reply, emailing me is the better option.Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to indiabrief@ft.com.
