India slaps Rs 4,389 cr notice on Oppo for import duty evasion

Chinese phone maker Oppos India unit has been slapped with a notice for alleged Rs 4389 crore import duty evasion the Finance Ministry said on WednesdayA showcause notice SCN has been slapped on Oppo India on July 8 after the recovery of documents during searches on its premises that indicated wilful misdeclaration in the description of some imports and remittance of royalty and license fees to various MNCs including those based in ChinaDuring an investigation of Oppo Mobiles India Pvt Ltd a subsidiary of Guangdong Oppo Mobile Telecommunications Corporation Ltd the Directorate of Revenue Intelligence DRI has detected Customs duty evasion of around Rs 4389 crore the ministry said in a statementReacting to the development Oppo India said it has a different view on the charges mentioned in the SCN and will take appropriate steps including legal remediesWe have a different view on the charges mentioned in the SCN We believe its an industrywide issue many corporates are working on Oppo India is reviewing the SCN received from DRI and we are going to reply to the notice presenting our side and will be working further with the related government departmentsOppo India is a responsible corporate and believes in the prudent corporate governance framework Oppo India will take appropriate steps as may be needed in this regard including any remedies provided under the law Oppo said in an email responseOppo India is engaged in the business of manufacturing assembling wholesale trading distributing of mobile handsets and accessories thereof across India It deals in various brands of mobile phones including Oppo OnePlus and RealmeDuring the investigation searches were conducted by the DRI at the office premises of Oppo India and residences of its key management employees which led to the recovery of incriminating evidence indicating wilful misdeclaration in the description of certain items imported for use in the manufacture of mobile phonesThis misdeclaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to Rs 2981 croreSenior management employees and domestic suppliers of Oppo India questioned by the DRI officers accepted the submission of wrongful description before the customs authorities at the time of import the ministry saidThe investigation also revealed that Oppo India had remittedmade provisions for payment of royalty and licence fee to various multinational companies including those based in China in lieu of the use of proprietary technologybrandIPR license etcThe said royalty and licence fees paid by Oppo India were not being added to the transaction value of the goods imported by them in violation of provisions of the Customs Act The alleged duty evasion by Oppo India on this account is Rs 1408 croreThe ministry further said that Oppo India has voluntarily deposited Rs 450 crore as partial differential customs duty short paid by themAfter completion of the investigation a showcause notice has been issued to Oppo India demanding Customs duty amounting to Rs 4389 crore The notice also proposes relevant penalties on Oppo India its employees and Oppo China under the provisions of the Customs Act 1962 the Ministry saidIn December last year the Income Tax department too had conducted searches against Chinese handset manufacturing companies including Oppo and their linked persons and claimed to have detected alleged unaccounted income due to violation of the Indian tax law and regulationsThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever