Xiaomi India Receives Rs 653 Crore Tax Evasion Notice, Statement Issued By Company


Recently, the Income Tax Department had raided many Xiaomi and Oppo offices. Now, according to the latest news, the Ministry of Finance reported on Wednesday that Chinese smartphone maker Xiaomi has evaded customs duties worth Rs 653 crore. Xiaomi Technology India Private Limited (Xiaomi India) is said to evade customs duties by undervaluation.

Xiaomi India Receives Rs 653 Crore Tax Evasion Notice

According to the news agency, the Ministry of Finance charged Xiaomi India with tax evasion of 653 million rupees and issued a notice to the company in this regard. The company is accused of evading customs duties by undervaluation. Let us tell you that the Directorate of Revenue Intelligence (DRI) also launched an investigation against the company and its manufacturers.

Issuing the statement, the ministry said: “Following the completion of the investigation by DRI, three show cause notices to M / s Xiaomi Technology India Pvt Ltd for the claim and recovery of taxes of Rs.653 crore during the period between 01.04.2017 and 30.06.2020. “(Show cause notices) have been issued”.

As we mentioned, the searches were carried out by the DRI in the Xiaomi India offices located in several cities of the country, in which, according to the address, several incriminating documents have been recovered. According to the information, it was learned that Xiaomi India was remitting royalties and license fees to Qualcomm US and Beijing-based Xiaomi Mobile Software under a contractual obligation.

The investigation conducted by DRI further revealed that Xiaomi India is involved in the sale of ‘MI’ brand mobile phones and these mobile phones are imported by Xiaomi India or by contracted manufacturers of Xiaomi India for mobile phone parts. And the components are imported and assembled in India. MI brand mobile phones manufactured by these manufacturers are exclusively sold to Xiaomi India through contractual agreements.

The evidence found during the investigation by DRI indicated that Xiaomi India and its contracted manufacturer were not including the amount of royalties paid by Xiaomi India in the taxable value of goods imported by Xiaomi India and the contractors, which contravenes section 14 of the Customs Law of 1962 and Customs Valuation Standards (Determination of the Value of Imported Goods) of 2007.

Xiaomi India spokesperson said: “We made sure to comply with all Indian laws. We are currently reviewing the notice in detail. As a responsible company, we will all support the authorities with the necessary documents.”

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