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Indian authorities go after Oppo for tax evasion after Vivo and Xiaomi

The Directorate of Revenue Intelligence (DRI) has detected customs duty evasion of around Rs 4,389 crore by smartphone manufacturer Oppo

What's the news? The Indian Directorate of Revenue Intelligence (DRI) has detected customs duty evasion of around Rs 4,389 crore by smartphone manufacturer Oppo India, the Ministry of Finance said in a press release dated July 13. What are the details of the alleged evasion? DRI conducted raids 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 by Oppo for use in the manufacture of mobile phones, DRI said. "This mis-declaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to Rs 2,981 crore. 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," the press release explained. Additionally, DRI's investigation also revealed that Oppo India 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. This  ‘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. The alleged duty evasion by Oppo India on this account is Rs. 1,408 crores, the press release added. Why does this matter? Indian regulators are already after two other smartphone brands, Xiaomi and…

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