It’s just like a storm for Chinese mobile manufacturing companies operating in India as Indian government is looking into cases of alleged tax evasion by three major Chinese mobile companies likes of Oppo, Vivo India and Xiaomi and notices have issue to them, respectively.
The cases slap against these companies range from allegations in what the government term as income tax evasion and customs violations to fraud and money laundering.
Union Finance Minister Nirmala Sitharaman inform the Upper House of the Parliament that the Department of Revenue Intelligence (DRI) issue notice to Oppo for a total customs duty of Rs. 4,389 crore on the grounds of misdeclaration of certain goods, leading to a short payment in duties.
Duty evasion, Nirmala Sitharaman said, is about Rs. 2,981 crores.
While, ED had reportedly conduct searches at more than 40 locations including Uttar Pradesh, Madhya Pradesh and some southern states in connection in connection with a money laundering case register against these Chinese smartphone manufacturer Vivo.
In July 2022, the ED reportedly block nearly 119 bank accounts link to Vivo’s India that were holding many hundred crores as part of a probe into alleged money-laundering which the enforcement agency term a “heinous economic offence”.
In response, the mobile company move to Delhi High Court seeking permission to operate its bank account to which the Court allow the company to operate the bank accounts subject to furnishing a bank guarantee of Rs. 950 crores.
The Directorate of Revenue Intelligence (DRI) again said it detect customs duty evasion of around Rs. 2,217 crore by Vivo Mobile India.
Talking about Xiaomi, three showcase notices have issue and their approximate duty liability is about Rs 653 crore, of which it had deposit only Rs 46 lakh, Union Finance Minister Nirmala Sitharaman said.
ED in late April reportedly seize Rs. 5,551.27 crore of Xiaomi Technology India Pvt Ltd, a wholly-own subsidiary of the China-based Xiaomi group, under the Foreign Exchange Management Act (FEMA) in connection with illegal remittances made by the firm in February 2022.
The seized amount of Rs. 5,551.27 crore, it had alleged, was lying in the bank accounts of Xiaomi Technology India Pvt Ltd, which start its operations in India in 2014 and start remitting the money in 2015.
After the ED’s crackdown, Chinese telecom firm Xiaomi said it was commit to working closely with the government authorities to clarify what it termed as “misunderstandings”.
Xiaomi spokesperson said :
“As a brand commit to India, all our operations are firmly compliant with local laws and regulations. We have studied the order from government authorities carefully,”.
As it believe the company’s royalty payments and statements to the bank were all “legit and truthful”.
Also, ED had reportedly summon Manu Kumar Jain, a former head of Xiaomi’s India unit, in the case in mid-April this year.
Xiaomi spokesperson had then also said the ED was looking at 18 companies that were establish by Vivo, where they have voluntarily remit Rs. 62,000 crores as deposits.
Upon repeate charges against the Chinese companies relate to serious economic offences, Beijing respond by saying it was closely following developments besides stressing on the matter that the Chinese government has always ask the companies to abide by laws and regulations when doing business overseas.
China also express hope the Indian authorities will abide by laws as they carry out the investigation and enforcement activities and provide a truly fair business environment.
Chinese Foreign Ministry spokesperson said :
“We hope the Indian authorities will abide by laws as they carry out the investigation and enforcement activities and provide a truly fair, just and non-discriminatory business environment for Chinese companies investing and operating in India,”.
According to the Indian foreign ministry spokesperson, companies who operate here need to follow the law of the land and it believes that the authorities are taking steps as per law.
