Customs duty evasion of Rs 4389 crore by Oppo India unearthed by Directorate of Revenue Intelligence

Meanwhile, last week, Chinese smartphone company Vivo was found to be involved in huge 'hawala' transactions. The ED has found that out of the total sale proceeds of Rs 1,25,185 crore, Vivo India remitted Rs 62,476 crore -- almost 50 per cent of the turnover out of India, mainly to China.

New Delhi: The Directorate of Revenue Intelligence (DRI) has searched Chinese smartphone Oppo's Indian unit and unearthed customs duty evasion of Rs 4389 crore by Oppo India. 

"During the course of investigation, searches were conducted by DRI at the office premises of Oppo India and residences of its key management employees, which led to the recovery of incriminating evidence indicating wilful mis-declaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones. 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," said a DRI release

The DRI further said that investigation also revealed that Oppo India had remitted / made provisions for payment of ‘Royalty’ and ‘Licence Fee’ to various multinational companies, including those based in China, in lieu of use of proprietary technology/brand/IPR license etc.

"The said ‘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 Section 14 of the Customs Act, 1962, read with Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007. The alleged duty evasion by M/s Oppo India on this account is Rs. 1,408 crores," DRI added.

After completion of the investigation, the DRI has issued a Show Cause Notice to Oppo India demanding Customs duty amounting to Rs. 4,389 crore.

Last week, ED carried out searches at 48 locations across the country belonging to Vivo Mobiles India Private Ltd and its 23 associated companies such as Grand Prospect International Communication Pvt Ltd (GPICPL), and so far, 119 bank accounts of various entities with gross balance to the tune of Rs 465 crore, including FDs to the tune of 66 crore, of Vivo India, 2 kg gold bars, and cash amounting to approximately Rs 73 lakh has been seized under the provisions of the PMLA.