The Directorate of Revenue Intelligence (DRI), according to a statement made public on Wednesday, conducted searches at the premises of mobile company Oppo India and found evidence of the firm evading customs taxes to the tune of Rs 4,389 crore. Oppo India is owned by Guangdong Oppo Mobile Telecommunications Corporation Ltd, a Chinese company.
Directorate of Revenue Intelligence (DRI) searched mobile company Oppo India & unearths customs duty evasion of Rs 4389 Cr by Oppo India: DRI
— ANI (@ANI) July 13, 2022
During the course of the investigation, DRI searched Oppo India’s office building and the residences of its top managers. This led to the discovery of incriminating evidence that indicated willful misrepresentation in the description of some items imported by Oppo India for use in the production of mobile phones. Due to this miscalculation, Oppo India lied and claimed Rs 2,981 crore in ineligible duty exemption benefits.
The inquiry also revealed that the company had sent money or made arrangements for the payment of “Royalty” and “License Fee” to various international companies, including those located in China, in return for the right to exploit proprietary technology, a specific brand, an IPR licence, etc.
“The said ‘Royalty’ and ‘Licence Fees’ paid by the company 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 alleged duty evasion by M/s Oppo India on this account is Rs. 1,408 crores,” the statement reads.
Following the conclusion of the investigation, Oppo was given a Show Cause Notice asking for Rs. 4,389 crores in customs tax. In line with the provisions of the Customs Act of 1962, the Notice also suggests imposing fines on Oppo India, its employees, and Oppo China.
The searches were conducted only days after the Enforcement Directorate (ED) searched more than 40 locations throughout India in connection with a money-laundering investigation. The ED alleged that out of the total sale proceeds of 1,25,185 crores, Vivo India’s nearly 23 affiliated companies, including Grand Prospect International Communication Pvt Ltd (GPICPL), transferred enormous sums to the company and sent 62,476 crores, or nearly 50% of the turnover, out of India, pretty much exclusively to China.
