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China's Xiaomi, Oppo, Vivo face tax evasion probe in India

China's Xiaomi, Oppo, Vivo face tax evasion probe in India

As per the Finance Ministry, a show cause notice demanding Rs 4,403.88 crore has been served to Oppo, based on the investigation by the Department of Revenue Intelligence.

India probing three Chinese mobile companies India probing three Chinese mobile companies

The Ministry of Finance has said that the Department of Revenue Intelligence (DRI) is looking into cases of tax evasion by three Chinese mobile companies. The companies, it said, are Oppo Mobiles India Ltd, Xiaomi Technology India, and Vivo Mobiles India Pvt Ltd. 

The ministry added that a show cause notice demanding Rs 4,403.88 crore has been served to Oppo, based on the investigation by DRI.

Five cases of customs duty evasion have been booked against Xiaomi.

In a reply to the Rajya Sabha, the ministry added that investigation by the Enforcement Directorate (ED) revealed that Vivo had remitted Rs 62 lakh crore, mainly to China and its controlled territories. This is out of the Rs 1.25 lakh crore of sales in the period July 2017 to March 2021, which translates to 49.91 per cent. 

It added that during the period of 2019 to 2022, cases against 43 such other companies have been booked. “As regards to Central Board of Direct Taxes (CBDT), investigation directorates have undertaken search and seizure actions in cases of 5 groups pertaining to the telecom sector, in which tax evasion has been detected,” said the ministry. 

Vivo India, had earlier last month moved Delhi High Court against the freezing of all its bank accounts. The company in its appeal had said that more than Rs 2,826 crore of monthly payments including employee salaries, office rents, bank financing payments, and other expenditures are on hold because its bank accounts have been frozen. Vivo added that custom duties, GST payments, also cannot be made by the company since the accounts cannot be accessed. 

In February, tax officials froze $478 million worth of deposits lying in local bank accounts of China's Xiaomi Corp as part of an investigation into alleged tax evasion, according to reports.

Also read: After ED raids, Vivo moves HC against freezing of bank accounts

Also read: I-T Dept froze $478 million of Xiaomi funds in February: Report