Directorate of Revenue Intelligence detects Customs duty evasion of Rs.2,217 crores by Vivo Mobile

Vivo India has voluntarily deposited a "sum of Rs 60 crore" towards the discharge of its differential duty liability, the Finance Ministry said

Vivo India has voluntarily deposited a
Vivo India has voluntarily deposited a "sum of Rs 60 crore" towards the discharge of its differential duty liability, the Finance Ministry said

Vivo India served notice for customs duty evasion

Chinese Mobile phone maker’s India subsidiary Vivo Mobile India Private Limited is caught by the Directorate of Revenue Intelligence (DRI) for a Customs duty evasion of Rs.2,217 crore. Previous month Enforcement Directorate found that a major Chinese mobile phone company had transferred more than Rs.62,000 crore (around 50 percent of the Indian turnover) to China. Vivo was pumping advertisements in media and was a major sponsor of IPL Cricket.[1]

“During an investigation pertaining to M/s Vivo Mobile India Private Limited (hereinafter referred to as ‘M/s Vivo India’), the Directorate of Revenue Intelligence (DRI) has detected Customs duty evasion of around Rs.2,217 crore. M/s Vivo India is a subsidiary company of M/s Vivo Communication Technology Co. Ltd., Guangdong, China, and is engaged in the business of manufacturing, assembling, wholesale trading as well as distributing mobile handsets and accessories thereof.

“During the course of the investigation, searches were conducted by DRI officers at the factory premises of M/s Vivo India, which led to the recovery of incriminating evidence indicating wilful misdeclaration in the description of certain items imported by M/s Vivo India, for use in the manufacture of mobile phones. This misdeclaration resulted in wrongful availment of ineligible duty exemption benefits by M/s Vivo India, amounting to Rs.2,217 crore. After completion of the investigation, a Show Cause Notice has been issued to M/s Vivo India demanding Customs duty amounting to Rs.2,217 crores, under the provisions of the Customs Act, 1962. A sum of Rs.60 crore has been voluntarily deposited by M/s Vivo India, towards discharge of their differential duty liability,” said DRI in a statement issued on Wednesday.

“Recently, in another set of investigations conducted by DRI, Show Cause Notices demanding duty of Rs.4,403.88 crores has been issued to M/s Oppo Mobiles India Private Limited,” added DRI.

After the India-China border tussles, many Chinese firms are on the radar of Indian agencies for illegally siphoning money to their home country. Vivo, Oppo, Huawei, ZTE, and Xiaomi were found for illegal money transfers and spying-related activities.[2]

The ED in April ordered the seizure of Rs.5,551 crore worth of deposits of Chinese smartphone giant Xiaomi India for alleged contravention of the Foreign Exchange Management Act (FEMA). The Income-Tax Department raided Chinese telecom company Huawei in February and it claimed to found alleged manipulation of account books for reducing taxable income in India by the company. Vivo had a 15 percent market share in the Indian smartphone segment in the first quarter of 2022 with the shipment of 5.5 million devices.

Reference:

[1] Vivo remitted Rs.62,476 crore (50% of turnover) to China to avoid getting taxed in IndiaJul 07, 2022, PGurus.com

[2] Espionage, profiling and economic control mark Chinese commercial companiesJun 06, 2022, ET

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