The government is investigating cases of alleged tax evasion by three Chinese mobile companies — Oppo, Vivo India and Xiaomi — and notices have been issued to them, Finance Minister Nirmala Sitharaman said on Tuesday. “The Department of Revenue Intelligence (DRI) has issued notices to Oppo, the mobile company, for a total customs duty of Rs 4,389 crore, and these are based on misdeclaration of certain goods, which has led to underpayment of customs duty. The tax evasion, we believe, is around Rs 2,981 crore,” Sitharaman said in Rajya Sabha’s reply to a question from BJP MP Sushil Modi.
“As far as undervaluation of imported goods for the purpose of payment of customs duty is concerned, we think it is an evasion of Rs 1,408 crore. So, that is for Oppo. Voluntarily, they have come forward to deposit Rs 450 crore, much against the total which stands at Rs 4,389 crore. That is the demand. They have given only Rs 450 crore,” she said in response to a question by BJP MP Sushil Modi.
She said the other two companies in the context of the question are Xiaomi and Vivo.
“Xiaomi, which is the other technology company, mobile phone company, which I think deals in assembled mobile phones of the Mi brand. Three showcause notices have been issued to them and their estimated dues are around Rs 653 crore. For the three showcause notices that have been issued, they have deposited only Rs 46 lakh. And the third company is Vivo India, for whom also a showcause notice has been issued for Rs 2,217 crore, for which they have deposited Rs 60 crore as voluntary deposit,” the minister said.
Sitharaman said the ED is also looking at 18 companies set up by Vivo that voluntarily transferred Rs 62,000 crore as down payment.
“Out of the total sales of Rs 1.25 billion, Vivo transferred a large amount through these 18 companies and it is suspected that Vivo India in turn transferred Rs 62 billion to its parent company, which is based outside India,” they said.
Sushil Modi said the ministry had informed him that around Rs 62,000 crore had been transferred to China and Chinese-controlled areas by Vivo Mobile India. He asked which other Chinese companies had transferred money to China and Chinese-controlled areas and the amount involved.
In response to another question, the minister said that DRI investigations are underway into many telecom companies.
“In the 43 companies, there are quite a few mixed companies with different shareholders, different countries of origin and so on, but I would like to draw the attention of the member at this stage to the duties that we are imposing on them. In ‘customs duty related evasion’, there are about 68 cases totalling Rs 1,342 crore; ‘GST related evasion’ cases, Rs 591 crore; and ‘service tax related evasion’, Rs 5.58 crore. The CBDT, and also the CBIC, are all taking action in that regard,” she said.
In response to a question from a BJD member about dubious loan applications, she said the member had raised “genuine concerns”.
“All I can say is that from the point of view of loans, loan related issues, apps are being misused, particularly from one particular country and as a result of that many of our citizens are being harassed and money is being extorted from them. These apps, rightly pointed out, are being downloaded in, let’s say, one Odisha, that’s the number, there are other states where reports are coming in. The finance ministry, corporate affairs, MeitY and a few other departments, including those, are all constantly discussing and working to ensure that action is taken,” Sitharaman said.
“I would just like to say here in general terms, not going into details, that in the recent past, just a few months ago, particularly in the state of Telangana, a lot of people have been harassed and actions have been taken. That is not to say that we are not taking action elsewhere. We are consciously taking action against Indian nationals who have also helped set up these companies and what can be broadly defined as ‘shell companies’ through which they operate. So actions are being taken from all these quarters. That is as far as I can answer at this point of time,” she added.
