Vivo served show cause notice for evading customs duty worth Rs 2,217 cr: Govt

The ongoing investigation against Vivo India has detected a customs duty evasion of around Rs 2,217 crores, as shared in a report from the Ministry of Finance on Wednesday. The Department of Revenue Intelligence (DRI) was looking into cases of tax evasion by three Chinese mobile companies - Oppo, Xiaomi, and Vivo.

DRI conducted searches at Vivo’s factory premises which "led to the recovery of incriminating evidence indicating wilful mis-declaration in the description of certain item” imported by Vivo to be used in the making of its mobile devices.

This “wilful mis-calculation” resulted in the “wrongful availment of ineligible duty exemption benefits” to the amount of Rs 2,217 crore. The report added that a show cause notice has also been issued to Vivo India demanding customs duty worth the same amount under the provisions of the Customs Act, 1962.

This demand aside, the report adds that Vivo India has voluntarily deposited Rs 60 crore “towards discharge of their differential duty liability”.

Earlier this month, Vivo had moved Delhi High Court to request access to its bank accounts after they were frozen due to the investigation. The company had said that more than Rs 2,826 crore of monthly payments (including office rents, employees’ salaries, payments, and other expenditures) were on hold since its bank accounts were frozen. Vivo had added that custom duties and GST payments were also on hold since it could not access its accounts.

Recently, the Ministry of Finance has also issued a show cause notice to Oppo demanding RS 4,403.88 crore based on the DRI investigations and five cases of customs duty evasion have also been booked against Xiaomi.

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