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Indian tax authorities have issued a notice to Oppo Mobiles India Pvt. Ltd. demanding ₹4,389 crore after an investigation into alleged evasion of customs duty, the finance ministry said in a statement on Tuesday.
The demand for customs duty raised last Friday also proposed certain penalties on Oppo India, its employees and the parent company Guangdong Oppo Mobile Telecommunications Corp. Ltd., the statement said.
The finance ministry said that Oppo India has voluntarily deposited ₹450 crore “as partial differential customs duty short paid by them."
OPPO India said in a statement that it has a different view on the charges made by the authorities in the show cause notice (SCN). “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."
Investigation into the alleged customs duty evasion was done by the Directorate of Revenue Intelligence (DRI). The total demand covers ₹2,981 crore of alleged availment of ineligible duty exemption benefits by Oppo India and alleged duty evasion related to payment of royalty and license fees to various multinational companies, including those based in China amounting to Rs. 1,408 crore, the ministry said.
Such ‘royalty’ and ‘licence fees’ paid by Oppo India were not being added in the transaction value of the goods imported by them, in violation of the Customs Act, the ministry alleged.
The ministry claimed that the senior management employees and domestic suppliers of Oppo India were questioned who in their voluntary statements accepted the submission of alleged wrongful description before the customs authorities at the time of import.
DRI conducted searches at the office premises of Oppo India and residences of its key management employees, the ministry said, adding that evidence indicating alleged wilful misdeclaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones was detected.