The Directorate of Revenue Intelligence on Wednesday found that Chinese smartphone manufacturer Oppo had evaded customs duty worth Rs 4,389 crore, the Union finance ministry said.
“During the course of investigation, searches were conducted by 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 mis-declaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones,” a press release by the finance ministry said on Wednesday.
The ministry said that this misdeclaration allowed Oppo India to wrongfully avail duty exemption worth Rs 2,981 crore.
The Directorate of Revenue Intelligence also alleged that the company paid royalty and licence fees to several multinational companies, including China-based firms, so that it could use proprietary technology and intellectual property.
“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 Centre alleged.
Oppo evaded customs duty of Rs 1,408 crore in this manner, the finance ministry alleged.
The company has voluntarily deposited Rs 450 crore with the authorities out of the total shortfall, the press release said.
Another Chinese mobile manufacturer, Vivo, is also being investigated for tax evasion.
On Thursday, the Enforcement Directorate froze Vivo’s bank accounts after alleging that the company had transferred Rs 62,476 crore to China to evade tax in India.
Delhi High Court on Wednesday allowed Vivo to operate its bank accounts but directed it to maintain a balance of Rs 250 crore in them at all times, according to Live Law reported. It also told the smartphone manufacturer to furnish a bank guarantee of Rs 950 crore.
The court also told Vivo to provide details about its remittances to China to the Enforcement Directorate.
The case will be heard on July 28.