Last week, Vivo was under the radar of Indian authorities for alleged money laundering and tax evasion. Now its sibling Oppo is accused of the same. The Directorate of Revenue Intelligence (DRI) investigated Chinese Phone manufacturer Oppo to find out customs duty evasion of nearly ₹4389 crores.
DRI conducted searches at Oppo India’s office premises and the residences of its leading management employees during the course of the investigation, which resulted in the recovery of incriminating evidence indicating willful misdeclaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones.
Oppo India seems to be in trouble, however, it’s not alone. Last week, the Enforcement Directorate (ED)–India’s financial watchdog–conducted raids against Vivo and related firms at more than 40 places across India under a money-laundering investigation. The ED claimed that Vivo India “remitted” almost 50 percent of its turnover to China in order to avoid taxes.
“During an investigation pertaining to M/s Oppo Mobiles India Private Limited (hereinafter referred to as Oppo India), a subsidiary company of Guangdong Oppo Mobile Telecommunications Corporation Ltd, China (hereinafter referred to as Oppo China), the Directorate of Revenue Intelligence (DRI) has detected customs duty evasion of around Rs 4,389 crore,” the finance ministry said in a statement on Wednesday.
As per the Finance Ministry, the investigation also revealed that Oppo India made various provisions for the payment of ‘royalty’ and ‘licensing fee’ to numerous global firms in exchange for the use of proprietary technology/brand/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 (Determination of Value of Imported Goods) Rules 2007. The alleged duty evasion by M/s Oppo India on this account is Rs. 1,408 crores,” said the statement.
A Show Cause Notice has also been issued to Oppo India asking the Customs duty worth Rs. 4,389 crores. The Notice also suggests fines against Oppo India, its workers, and Oppo China in accordance with the requirements of the Customs Act of 1962.
Related:
