SUMMARY
The DRI probed the premises of Oppo India along with residential properties of its key management employees
In Oppo India’s case, the DRI found out that the smartphone maker repatriated money as royalty and licence fee to various multinational companies including Chinese ones
Earlier, the Enforcement Directorate probed Chinese smartphone manufacturer Vivo under anti-money laundering case
After Vivo, Oppo India, the Chinese smartphone maker’s Indian subsidiary has now come under the scanner of the Directorate of Revenue Intelligence (DRI) for evading tax worth INR 4,389 Cr.
The DRI probed the premises of Oppo India along with residential properties of its key management employees. During the investigation, it has come out that Oppo India had misdeclared certain items while importing them to avail custom duty exemption benefits.
“This mis-declaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to INR 2,981 Cr. Among others, senior management employees and domestic suppliers of Oppo India were questioned, who in their voluntary statements accepted the submission of wrongful description before the Customs Authorities at the time of import,” the DRI said.
Earlier, the Enforcement Directorate probed Chinese smartphone manufacturer Vivo under an anti-money laundering case. The investigation revealed that INR 62,476 Cr were transferred by Vivo India to its Chinese parent to evade taxes in India.
As a result, the regulatory body seized 119 bank accounts of Vivo, with a gross balance amounting to INR 465 Cr. The seized money includes fixed deposits amounting to INR 66 Cr, 2kg gold bars and cash up to INR 73 Lakh.
While in Oppo India’s case, the DRI found that the smartphone maker repatriated money as royalty and licence fee to various multinational companies including Chinese ones in exchange of use of proprietary technology or brand or IPR license etc.
“The said ‘Royalty’ and ‘Licence Fees’ paid by Oppo India were not being added in the transaction value of the goods imported by them, in violation of Section 14 of the Customs Act, 1962, read with Rule 10 of the Customs Valuation Rules 2007. The alleged duty evasion by M/s Oppo India on this account is INR 1,408 Cr,” the DRI informed.
A total of INR 450 Cr has been voluntarily deposited by Oppo India as a partial differential Customs duty short paid by them.
Following the investigation, a show-cause notice has been issued to Oppo India asking to deposit Customs Duty up to INR 4,389 Cr. Besides, Oppo India, its employees, and its Chinese parent are also penalised under the Customs Act, 1962.
