Oppo now accused of tax EVASION of Rs. 4389 Crores by Indian Govt

Oppo is said to have evaded custom duty worth Rs. 4389 crores by the Directorate of Revenue Intelligence (DRI). Here are all the details.

Oppo has been alleged to evade customs duty by the Directorate of Revenue Intelligence. (Representational Image) (Amritanshu / HT Tech)

After a flurry of raids against Chinese smartphone companies like Xiaomi and Vivo, the Indian Government agencies have now gone after Oppo and unearthed a massive customs duty evasion. The Directorate of Revenue Intelligence (DRI) after conducting raids has found that the company has evaded customs duty worth Rs. 4,389 Crores, and is now asking the company to pay the same. Another report says that Oppo officials have approved of the error and has already made a pre-payment of Rs. 4.5 billion.

The Directorate of Revenue Intelligence (DRI) has searched the offices of Guangdong Oppo Mobile Telecommunications Corp.'s local unit and questioned the company's management, said India's Finance Ministry on Wednesday. According to a report from Bloomberg, it is said that agency found found “incriminating evidence indicating willful mis-declaration of imported tools and components used to make phones.”

Oppo found to evade tax

The report also says that Oppo also failed to include the licensing fees paid to overseas companies while calculating the value of goods imported. Unlike the previous cases with Xiaomi and Vivo, Oppo management and suppliers have acknowledged the errors and the company has been confirmed to make a pre-payment of Rs. 4.5 billion, says the ministry. Oppo is yet to make an official announcement on this front.

“During the course of investigation, searches were conducted by 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 mis-declaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones,” said the finance ministry said on Wednesday.

Oppo also declared that it pays royalty and license fees to other companies in China for using their technologies. “The said ‘Royalty' and ‘Licence Fees' paid by Oppo India 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 Centre added.

The case comes just weeks after rival Chinese smartphone makers Xiaomi and Vivo were found guilty on similar lines. Xiaomi was accused of money laundering case, wherein it was moving money out of the country by falsely claiming patent-fee payments. Vivo's accounts were seized by the agencies as well after a similar money laundering case. Vivo has pleaded to get remove the ban on its accounts in order to make the necessary payments to the staff and other related payments. A similar case is also ongoing with Chinese firm Huawei.