Oppo, Vivo India and Xiaomi served notices for tax evasion: Nirmala Sitharaman

  • The government is looking into cases of alleged tax evasion by three mobile companies of China, the Finance Minister said today

Livemint
Updated2 Aug 2022
Union Finance Minister Nirmala Sitharaman speaks in Rajya Sabha during the Monsoon Session of Parliament, in New Delhi on Tuesday. (ANI Photo/ SansadTV)
Union Finance Minister Nirmala Sitharaman speaks in Rajya Sabha during the Monsoon Session of Parliament, in New Delhi on Tuesday. (ANI Photo/ SansadTV)

As the government is cracking the whip on several multi-crore Chinese firms such as Vivo, Oppo, and Xiaomi, Union Finance Minister Nirmala Sitharaman today informed the Rajya Sabha that notices have been issued to these companies.

The government is looking into cases of alleged tax evasion by three mobile companies of China, the Finance Minister has said.

Sitharaman said the three firms are Oppo, Vivo India and Xiaomi while replying to supplementaries during the Question Hour.

The Department of Revenue Intelligence (DRI) has issued a notice to mobile company Oppo for total customs duty of 4,389 crore and these are on the grounds of mis-declaration of certain goods leading to a short payment in customs duty, she said, adding, "duty evasion we think is about 2,981 crore".

"Undervaluation of imported goods for the purpose of payment of customs duty, that we think is an evasion of 1,408 crore," the FM said.

She also said voluntarily they have come about to deposit 450 crore, much against the demand of 4,389 crore.

Regarding the other firms, the FM said Xiaomi is another mobile company which deals with assembled MI mobile phones.

"Three show-cause notices have been issued to them and the approximate duty liability there is about 653 crore.For the three show cause notices, they have been issued, they have deposited only 46 lakh," the minister added.

The third firm is Vivo India, for whom also there is a demand notice issued for 2,217 crore for which they have deposited 60 crore as voluntary deposit, Sitharaman informed the House.

“Besides these, the ED is looking at 18 companies that were established by the same group Vivo and there they have voluntarily remitted 62 crore as deposit but the parent company outside of India has the total sales of 1.25 lakh crore.”

"Of the 1.25 lakh crore total sales, Vivo has transferred through these 18 companies huge amounts of funds and it is believed that Vivo India has, in turn, remitted 0.62 lakh crore to its parent company which is outside India," she added.

Various central agencies, including the Enforcement Directorate (ED), Income Tax Department, and Directorate of Revenue Intelligence (DRI), have started investigations against these firms.

Reports said though these firms were registered in India as separate entities from their parent companies, they were taking "directions from China" and "routing substantial amounts of money" back to the neighbouring country.

The Ministry of Corporate Affairs earlier this year registered over 700 cases against firms with alleged Chinese links.

With agency inputs

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