Chinese company Oppo under tax sleuths’ lenses for alleged evasion in Customs duty of Rs 4,389 crore

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Oppo Mobiles India Private Limited, a subsidiary of the China-based Guangdong Oppo Mobile Telecommunication Corporation Ltd, has been accused by another telecommunication equipment company of evading customs duty in the amount of Rs 4,389 million. According to the Directorate of Revenue Intelligence, Oppo Mobiles India Private Limited was a subsidiary of China’s Guangdong Oppo Mobile Telecommunications Corporation Ltd. They discovered Customs duty evasion of approximately Rs 4,389 crore during their investigation.

Oppo India is involved in manufacturing, assembling wholesale trading and distribution of mobile handsets across India.

| Indian government and Xiaomi: What is the situation?

Both Oppo and Vivo are owned by China’s BBK Electronics Corporation, along with Realme, OnePlus and iQOO.

According to DRI officials, during searches at the official premises of Oppo India offices and residences of its key management employees, they recovered “incriminating evidence indicating wilful misdeclaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones”.

The alleged misdeclaration led to Oppo India wrongfully availing ineligible duty exoneration benefits, which amounted to Rs 2,981 crore.

The DRI questioned senior management staff and domestic suppliers at Oppo India. The DRI questioned senior management employees and domestic suppliers of Oppo India.

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“Investigations also revealed that Oppo India had remitted or made provisions for payment of royalty and licence fee to various multinational companies, including those based in China, in lieu of the use of proprietary technology, brand, IPR licence, etc. The amounts paid by Oppo India were not being added to the transaction values of the goods imported by them,” said the Finance Ministry in a statement.

Officials from DRIs claimed that Oppo India has broken the Customs Act and Customs Valuation (Determination Of Value of Imported Goods Rules).

| Xiaomi India was notified by three notices to collect the Rs 653 crore custom duty that it had evaded

“The alleged duty evasion by Oppo India on this account is Rs 1,408 crore. A sum of Rs 450 crore has been voluntarily deposited by Oppo India, as partial differential Customs duty,” added the statement.

Oppo India has received a showcause notice demanding Customs duty in the amount of Rs 4,389 crore. The notice issued by the Customs Act to Oppo India has included relevant penalties for Oppo India, its workers and Oppo China.

The Enforcement Directorate had earlier seized more than Rs 5.500 crore from Xiaomi and 119 Vivo bank accounts for allegedly violating the rules.

— ENDS

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