Finance Minister Nirmala Sitharaman on Tuesday informed Rajya Sabha that three mobile phone companies — Oppo India, Xiaomi Technology India Pvt. Ltd., and Vivo Mobiles India — are under investigation for duty evasion and remitting sales proceeds to companies outside India. All three companies are from China.
Ms. Sitharaman said that the government was taking cognisance of the cases where digital loan apps “originating from one particular country” were being misused to harass citizens and extort money. She added that the “government is consciously taking action against Indian citizens who have helped in having these companies established and other shell companies through which they are operating.”
Responding to a question from member Sushil Modi, about Chinese companies that have remitted money to China and China-controlled territories, the Minister said the Directorate of Revenue Intelligence (DRI) has issued a notice to Oppo for ₹4,389 crore duty evasion on grounds of misdeclaration of certain goods. “The duty evasion is about ₹2,981 crore, undervaluation of imported goods of ₹1408 crore. Oppo has voluntarily deposited ₹450 crore against ₹4,389 crore demand,” she detailed.
Three show-cause notices have been served to Xiaomi, whose approximate duty liability is ₹653 crores. “For the three show-cause notices they have deposited only ₹46 lakhs,” the minister said, adding that “the third company is Vivo India and a demand notice has been given for ₹2,217 crore for which they have deposited ₹60 crore.”
Besides this, Enforcement Directorate (ED) is looking at 18 companies established by Vivo, she said. While the company has voluntarily remitted ₹62 lakh crores as deposit, it is believed that Vivo India has remitted ₹0.62 lakh crore to its parent company outside India, through these 18 companies, for the total sales of 1.25 lakh crore that happened between July 2017 and March 2021, the Minister explained in a written reply.
Five cases of customs duty evasion have been booked against Xiaomi Technology India, she added.
During the 2019 to 2022 period, Central Board of Indirect Taxes & Customs (CBIC) registered cases against 43 other such companies. As for the Central Board of Direct Taxes (CBDT), Investigation Directorates have undertaken search and seizure actions in cases of five groups pertaining to the telecom sector, for tax evasion, the reply mentioned.
Responding to a question by Prime Minister Narendra Modi about how many of those 43 companies under CBIC lens were Chinese, Ms. Sitharaman said that all companies belong to different countries.
Meanwhile, the Ministry of Home Affairs (MHA) informed the Lok Sabha on Tuesday that 81 Chinese nationals were given “Leave India Notice” in the years 2019, 2020 and 2021. While as many as 117 Chinese persons were deported, 726 others were placed on adverse list for violating visa conditions or other illegal acts, it added.
