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.

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,

Two sources said Kia's case was similar to that of Volkswagen, accused of evading a higher tax of 30% to 35% applicable on parts imported in "completely knocked down" or CKD form in a single shipment, instead shipping separate parts over days, making them eligible for a tax rate of just 10% to 15%.

Kia India told the BBC it has already filed a "detailed response supported by comprehensive evidence and documentation" to the tax claim, issued by a customs commissioner in the city of Chennai. It did not provide further details.

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.

Kia India has received a tax demand notice from the authorities over component imports even as the automaker has denied any wrongdoing noting that it has filed a "detailed response" regarding the matt