The Directorate of Revenue Intelligence (DRI) has uncovered a custom duty of Rs 4,389 crore by smartphone manufacturer Oppo India, according to a statement released by the Ministry of Finance. The offices of Oppo India and the residences of its key executives were searched by DRI.
Oppo India has been given a show-cause notice by the Directorate of Revenue Intelligence (DRI), questioning 4,389 crores worth of Custom duty. Moreover, the notification warns that penalties would be imposed on both the firm and its employees and Oppo China in compliance with the Customs Act.
The government said that DRI conducted several searches at the offices of Oppo India and the homes of senior management personnel. These searches resulted in the collection of damning evidence, which indicated wilful misdeclaration in the description of specific products imported by the corporation for the purpose of using them in the production of mobile phones.
“Because of this wrong declaration, Rs 2,981 crores worth of duty exemption benefits were wrongly taken by Oppo India.” Senior management employees and domestic suppliers of Oppo India, who in their voluntary statements accepted the submission of a false description to the Customs Authorities at the time of import, were among those who were questioned, DRI said in a statement.
“Licence Fee” and “Royalty” were paid by Oppo India to a number of global corporations, including those headquartered in China, in return for accessing their proprietary technology, brand, and other intellectual property rights (IPRs). The anti-smuggling branch of the Central Board of Indirect Taxes and Customs said in a statement.
Oppo India did not include the “royalty” and “licensing fees” that they paid in the transaction value of the goods that they brought into the country, which was a violation of Section 14 of the Customs Act and Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. These rules were put in place in 2007 to determine the value of imported goods. According to the agency, it’s possible that Oppo India skipped paying taxes on this account amounting to 1,408 Crores.
According to the ministry’s statement, the company Oppo India has voluntarily deposited the amount of Rs 450 crore, which represents the partial differential customs duty that they have been short paying.
