After Vivo, a Chinese replica operating in India is also being pursued by the authorities. The Directorate of Revenue Intelligence (DRI) discovered that Oppo India had evaded customs duties to the tune of Rs 4,389 crore.
The Chinese smartphone manufacturer Oppo India was caught evading customs duties to the tune of Rs 4,389 crore on Wednesday by the Directorate of Revenue Intelligence (DRI).
According to DRI’s statement on July 13, searches were carried out by the authorities throughout the course of the inquiry at Oppo India’s office premises and the homes of its top management workers.
‘This mis-declaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to Rs 2,981 crores. 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,” stated DRI.
Following the conclusion of the investigation, Oppo India was served with a show-cause notice requesting payment of customs duties of Rs. 4,389 crore. According to DRI, the notice also suggests fines for Oppo China, Oppo India, and its personnel in accordance with the Customs Act of 1962.
The investigation also showed that Oppo India had remitted or made arrangements for the payment of “Royalty” and “Licence Fee” to a number of multinational corporations, including those with headquarters in China, in lieu of using proprietary technology, a brand, or obtaining an IPR licence, among other things.
According to Section 14 of the Customs Act of 1962, read with Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007, Oppo India did not include the aforementioned “Royalty” and “License Fees” in the transaction value of the goods they imported. The claimed duty avoidance by Oppo India on this account is Rs. 1,408 crore.
Oppo India is a subsidiary company of Guangdong Oppo Mobile Telecommunications Corporation Ltd., often known as Oppo China, and deals in a variety of smartphone brands, including Oppo, OnePlus, and Realme.
The company, in a statement, said: “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 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 Enforcement Directorate (ED) had already stepped up its investigation into the Vivo money laundering case. On June 5, the ED conducted raids at at least 44 locations in India as part of a money-laundering probe involving a Chinese smartphone manufacturer and related businesses.
Sections of the Prevention of Money Laundering Act (PMLA) were used to conduct the searches at locations across many states, including Delhi, Uttar Pradesh, Meghalaya, and Maharashtra.