Oppo India allegedly evaded Rs 4,389 crore in Customs duty
The DRI claims to have detected a customs duty evasion of around Rs 4,389 crore by Oppo India in a recent investigation. The tech company has deposited a voluntary sum of Rs 450 crores as of now and has been issued a Show Cause Notice that proposes relevant penalties on Oppo India, its employees and Oppo China.
The Directorate of Revenue Intelligence (DRI) has detected an alleged Customs duty evasion of around Rs 4,389 crore by Oppo India in a recent investigation at the office premises and residences of key management employees.
According to a government press release, searches conducted by DRI in January 2021 led to the recovery of incriminating evidence indicating wilful misdeclaration in the description of certain items imported by Oppo India for use to make mobile phones.
This resulted in wrongfully availing ineligible duty exemption benefits by Oppo India amounting to Rs 2,981 crore. 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.
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The press release also mentions that Oppo India allegedly remitted/made provisions for payment of ‘royalty’ and ‘licence fee’ to various multinational companies, including those based in China, in lieu of the use of proprietary technology/brand/IPR license etc.
The said ‘royalty’ and ‘licence fees’ paid by Oppo India were not being added to 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 Oppo India on this account is Rs 1,408 crore, according to the release.
Oppo India has voluntarily deposited a sum of Rs 450 crores as partial differential Customs duty short-paid by them.
After the investigation, the company was issued a show-cause notice on July 8, demanding Customs duty amounting to Rs 4,389 crore. The said notice also proposes relevant penalties on Oppo India, its employees and Oppo China, under the provisions of the Customs Act, 1962.
Oppo India is engaged in the business of manufacturing, assembling, wholesale trading, and distributing mobile handsets and accessories thereof, across India. Oppo India deals in various brands of mobile phones, including Oppo, OnePlus and Realme.
First Published: Jul 13, 2022 3:14 PM IST
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