Moneycontrol PRO
you are here: HomeNewsBusiness

Now, Oppo India under govt scrutiny for alleged Customs duty evasion

After Vivo, another Chinese copy operating in India faces government action. The Directorate of Revenue Intelligence (DRI) has unearthed customs duty evasion of Rs 4,389 crore by Oppo India

July 13, 2022 / 07:29 PM IST
The DRI (Image: Reuters)

The DRI (Image: Reuters)

The Directorate of Revenue Intelligence (DRI) on Wednesday unearthed customs duty evasion of Rs 4,389 crore by Chinese smartphone manufacturer Oppo India.

During the course of investigation, searches were conducted by the authorities at the office premises of Oppo India and residences of its key management employees, according to DRI's statement on July 13.

Also Read: Vivo directors flee India as ED intensifies money laundering probe: Report

''This mis-declaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to Rs 2,981 crores. 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,'' stated DRI.

After completion of the investigation, a show cause notice was issued to Oppo India demanding customs duty amounting to Rs. 4,389 crore. The notice also proposes penalties on Oppo India, its employees and Oppo China, under the provisions of the Customs Act, 1962, stated DRI.

Close

The investigation 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 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, which is a 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. On this account, the alleged duty evasion by Oppo India is Rs. 1,408 crore.

Oppo India, which deals in various brands of mobile phones, such as Oppo, OnePlus, and Realme, is a subsidiary firm of Guangdong Oppo Mobile Telecommunications Corporation Ltd or Oppo China.

The company, in a statement, said: "We have a different view on the charges mentioned in the SCN. We believe it's an industry-wide issue many corporates are working on. OPPO India is reviewing the SCN received from DRI, and we are going to reply the notice, presenting our side, and will be working further with the related government departments. OPPO India is a responsible corporate and believes in prudent corporate governance framework. OPPO India will take appropriate steps as may be needed in this regard including any remedies provided under the law."

Also Read: ED raids on Vivo: India’s frequent investigations disrupt investment confidence, says Chinese Embassy

Earlier, the Enforcement Directorate (ED) intensified its inquiry into the money laundering case against Vivo. The ED raided at least 44 places across India on June 5 in a money-laundering investigation against the Chinese smartphone manufacturer and related firms.

The searches were carried out under sections of the Prevention of Money Laundering Act (PMLA) at locations in several states including Delhi, Uttar Pradesh, Meghalaya and Maharashtra.

Vivo directors Zhengshen Ou and Zhang Jie had fled from India as the ED intensified its inquiry into case against the firm, reported news agency ANI.
Moneycontrol News
Sections
ISO 27001 - BSI Assurance Mark