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DRI unearths Oppo's Rs 4,389-cr duty evasion
Directorate of Revenue Intelligence gets incriminating evidence indicating wilful misdeclaration of certain items imported by Chinese phone maker for use in the manufacture of mobile phones and it resulted in wrongful availment of ineligible duty exemption benefits amounting to Rs2,981 cr; Delhi HC allows Vivo to operate its bank accounts but with conditions
New Delhi: Revenue intelligence officers have detected Rs4,389 crore duty evasion by Chinese smartphone maker Oppo by misdeclaration of imports, the Finance Ministry said on Wednesday.
The Chinese company deals in mobile brands -- Oppo, OnePlus and Realme. During an investigation of Oppo Mobiles India Private Limited, a subsidiary of Guangdong Oppo Mobile Telecommunications Corporation Ltd - China (Oppo China), the Directorate of Revenue Intelligence (DRI) has detected Customs duty evasion of around Rs4,389 crore.
In an another development, Delhi High Court on Wednesday allowed Chinese smartphone maker Vivo to operate its bank accounts on the condition of furnishing a bank guarantee of Rs 950 crore and maintaining Rs 250 crore in its accounts
A Bench of Justice Yashwant Varma, while hearing Vivo's plea seeking permission to operate Vivo's frozen bank accounts, asked the company to comply with the directions within seven working days.
Back to Oppo India, it's engaged in the business of manufacturing, assembling, wholesale trading, distribution of mobile handsets and accessories thereof across India. It deals in various brands of mobile phones, including Oppo, OnePlus and Realme. During 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 by Oppo India for use in the manufacture of mobile phones.
"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 ministry said. The investigation also revealed that Oppo India had remitted/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 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 1,408 crore. A sum of Rs 450 crore has been voluntarily deposited by Oppo India, as partial differential Customs duty short paid by them. "After completion of the investigation, a show-cause notice has been issued to Oppo India demanding Customs duty amounting to Rs 4,389 crore.
