Kathmandu-Agni Incorporated, the official distributor of Indian automobile giant Mahindra in Nepal, has been found guilty of tax evasion during the import of Mahindra’s popular Scorpio models.

The Office of the Auditor General revealed that Agni deliberately understated the engine capacity of the Scorpio S5 and S11 variants while importing them through the Bhairahawa Customs Office. By declaring a lower engine capacity—subject to reduced tax rates—the company avoided paying the appropriate duties.

The Scorpio S5 and S11 models come with a 2,179 cc engine, which falls under customs subheading 8703.32.29 (diesel engines above 2,000 cc). This classification mandates an 80% customs duty, 90% excise duty, 10% road construction tax, and value-added tax. However, the vehicles were cleared under subheading 8703.32.10, intended for engines under 2,000 cc. The Auditor General has recommended that the government recover Rs 15,084,000 in unpaid taxes.

Agni Incorporated, a key player in Nepal’s automobile market and the authorized seller of Mahindra vehicles such as the Scorpio, Bolero, XUV700, and XUV400, now finds itself embroiled in controversy. The company, chaired by Cabinet Shrestha, has long enjoyed a reputation for clean and transparent business practices. Its involvement in this case marks a significant blow to that image.