Chinese subsidiary Oppo India caught in customs duty evasion of ₹4,389 crore: DRI
Oppo India is engaged in the business of manufacturing, assembling, wholesale trading, distribution of mobile handsets and accessories in India, and has various brands of mobile phones, including Oppo, OnePlus and Realme
The Directorate of Revenue Intelligence (DRI) has detected customs duty evasion of around ₹4,389 crore by Oppo Mobiles India Private Limited, a Chinese subsidiary of Guangdong Oppo Mobile Telecommunications Corporation Ltd, the Union finance ministry said.
Oppo India is engaged in the business of manufacturing, assembling, wholesale trading, distribution of mobile handsets and accessories in India, and has various brands of mobile phones, including Oppo, OnePlus and Realme.
“During the course of 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,” it said in a statement.
This misdeclaration resulted in “wrongful availment of ineligible duty exemption benefits” by Oppo India amounting to ₹2,981 crore, it said. “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,” it added.
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Investigations also revealed that Oppo India remitted through payments of royalty and licence fee to various multinational companies, including those based in China, in lieu of use of proprietary technology, brand, and intellectual property rights (IPR) licenses.
“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 alleged duty evasion by M/s Oppo India on this account is ₹1,408 crore,” it said.
Oppo India has voluntarily deposited ₹450 crore as partial differential customs duty short paid by them, it added.
After completion of the investigation, a show cause notice was issued to Oppo India demanding customs duty amounting to ₹4,389 crore, the statement said. The said notice also proposes relevant penalties on Oppo India, its employees and Oppo China, under the provisions of the Customs Act, 1962, it added.
“We have a different view on the charges mentioned in the SCN. We believe it’s an industry-wide issue many corporates are working on. Oppo India is reviewing the SCN received from DRI, and we are going to reply to the notice presenting our side, and will be working further with the related government departments. Oppo India is a responsible corporate and believes in prudent corporate governance framework. Oppo India will take appropriate steps as may be needed in this regard including any remedies provided under the law,” the company said in a statement.