Chinese Telecom Major Huawei Urges India To Relax Overseas Payments

SUMMARY

Huawei India has urged the Delhi High Court to alter its previous order of restraining repatriation to other countries

In April, the Income Tax department had found Huawei India manipulating its account books to decrease its taxable income in India

Last week, the I-T department told the HC that Huawei India so far sent money worth INR 750 Cr abroad whilst its revenue was trimming down drastically

Huawei India, an Indian subsidiary of Chinese telecom major Huawei, has urged the Delhi High Court to alter its previous order of restraining repatriation to other countries.

The ET report stated that the request has been made on the grounds of Huawei India’s inability to make payments to overseas suppliers.

In April, the Income Tax department had found Huawei India manipulating its account books to decrease its taxable income in India. Prior to this, it conducted investigations and also raided various offices of the Chinese OEM.

When the matter escalated to the apex court in April, the High Court restrained the Chinese OEM manufacturer from spending money abroad. It also postponed judgments on the case of the I-T department freezing Huawei’s bank accounts holding amounts to the tune of INR 1500 Cr.

Last week, the I-T department told the HC that Huawei India so far sent money worth INR 750 Cr abroad whilst its revenue was trimming down drastically.

In response, Huawei’s counsel said that the OEM company had been getting orders from Indian telecom service providers for telecom equipment and services. To fulfill these orders, it has to import equipment and spare parts from its overseas suppliers.

“Orders are placed pursuant to long-term contracts of the firm and that it (Huawei) is under contractual and legal obligation to fulfil these orders,” the counsel added.

In the last two years, the Indian government has been closely monitoring the activities of Chinese companies and investors in the country. After China and India’s army clash on Himalayan borders, the two countries have become sworn enemies.

As a result, the Centre has reduced Chinese companies’ and investors’ market share in the Indian economy. Furthermore, it also conducted searches on Indian subsidiaries of various Chinese players on the basis of the anti-money laundering act.

Recently, the Enforcement Directorate’s (ED) investigations revealed surprising information about the Chinese smartphone maker Vivo. A few days ago, the ED stated Vivo India repatriated INR 62,476 Cr to reduce its revenue in India and consequently, evaded tax payments.

Besides, the regulatory body froze 119 bank accounts of various associate entities of Vivo, having a gross balance up to INR 465 Cr.