(This article is authored by Alar)
Popular smartphone brands Oppo, Vivo, and Xiaomi have come into big trouble in India after the allegations of tax evasion. Union Finance Minister Nirmala Sitharaman has on Tuesday informed Rajya Sabha that notices have been issued to these three Chinese smartphone makers.
The companies have received notices from the Directorate of Revenue Intelligence (DRI) for duty evasion. The Finance Minister further said that these three companies had neglected their obligations to pay the appropriate taxes. She was responding to a query raised by BJP MP Sushil Modi in the Rajya Sabha. The development has drawn national attention.
The Finance Minister said, "The Department of Revenue Intelligence (DRI) has issued notice to Oppo, the mobile company, for a total customs duty of Rs 4,389 crore, and these are on the grounds of misdeclaration of certain goods, leading to a short payment in customs duty. That duty evasion, we think, is about Rs 2,981 crores". "Besides these, the ED is looking at 18 companies that were established by the same group Vivo and there they have voluntarily remitted INR 62 crore as a deposit but the parent company outside of India has a total sales of 1.25 lakh crore," she added.
Following Vivo India's denial of money laundering allegations and denial of the financial terrorism charge levied against it by the Enforcement Directorate (ED) in the Delhi High Court, a statement was made by Sitharaman regarding Xiaomi in which she stated that five cases of customs duty evasion had been filed against the Indian branch of the corporation in the matter involving Xiaomi.
She said, "Xiaomi, which is the other technology company, mobile phone company, which I think deals with assembled Mi brand mobile phones. Three showcause notices have been issued to them, and their approximate duty liability is about Rs 653 crore. For the three show-cause notices which have been issued, they have deposited only Rs 46 lakh. And, the third company is Vivo India, for whom also there is a demand notice given for Rs 2,217 crore, against which they have deposited Rs. 60 crore as a voluntary deposit".
It is pertinent to note that Vivo was one of the top 10 smartphone manufacturers in the first quarter of 2015, with a 2.7% global market share. According to the number of patent applications published under the PCT System in 2021, Oppo was ranked eighth in the world by the World Intellectual Property Indicators (WIPO) in its annual review.