Fraud: After Vivo, Chinese mobile brand Oppo is also under the cloud
Virendra Pandit
New Delhi: Only last week, the Enforcement Directorate seized 119 bank accounts of various entities with Rs 465 crore, including fixed deposits to the tune of Rs. 66 crores of Vivo India as it conducted searches at 48 locations across India. It found Vivo India remitted Rs 62,476 crores (almost 50 percent of the turnover out of India) to China.
On Wednesday, the media reported that the Directorate of Revenue Intelligence (DRI) slapped a Rs 4,389 crore show-cause notice on Oppo India on July 8 for allegedly evading customs duty by wrongfully availing exemption benefits.
Oppo India, the Indian subsidiary of a Chinese firm, deals in various brands of mobile phones, including Oppo, OnePlus, and Realme.
The DRI probes at the offices and residences of Oppo’s officials led to the recovery of incriminating evidence showing wilful misdeclaration in the description of certain items imported by the company for manufacturing mobile phones, the media reported, quoting the finance ministry.
“This misdeclaration resulted in wrongfully availing ineligible duty exemption benefits by Oppo India amounting to Rs 2,981 crore,” the finance ministry stated on Wednesday.
“The investigation has further revealed that Oppo India had remitted/made provisions for payment of ”royalty” and ”license fee” to various multinational companies, including those based in China, instead of using proprietary technology,” it added.
“The said ”royalty” and ”license fees” paid by Oppo India were not being added to the transaction value of the goods imported by them, in violation of Section 14 of the Customs Act, 1962. The duty evasion by the mobile maker on this account is Rs 1,408 crore,” the ministry said.
Oppo India has voluntarily deposited a sum of Rs 450 crore as partial differential customs duty short paid by them.
After completion of the investigation, a show-cause notice has been issued to Oppo India seeking payment of customs duty amounting to Rs. 4,389 crores.
It also proposed relevant penalties on Oppo India, its employees, and Oppo China under the Customs Act, 1962.
Oppo India manufactures, assembles, trades wholesale, and distributes mobile handsets and accessories across India.
“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”, the ministry noted.
