The Directorate of Revenue Intelligence (DRI) has unearthed customs duty evasion of about Rs 4389 cr by Oppo India. The tax evasion by the Chinese consumer electronic and mobile manufacturer company was detected after the agency conducted searches on office premises and residences of key management employees of Oppo India, the DRI on Wednesday said in a statement. After the completion of the investigation on July 8, a show-cause notice has been issued to Oppo India demanding customs duty amounting to Rs 4,389 cr.
According to DRI officials, searches led to the recovery of incriminating evidence indicating wilful mis-declaration in the description of certain items imported by the company, which were meant for use in the manufacture of mobile phones in India. The DRI launched an investigation into Oppo India, a subsidiary company of Guangdong Oppo Mobile Telecommunications Corporation of China, and senior management employees and domestic suppliers of the company in January this year.
The statement further said that employees in their voluntary statements accepted submissions of wrongful description before the customs authorities at the time of im
port. Those mis-declarations resulted in wrongful availing of ineligible duty exemption benefits by Oppo India amounting to Rs 2981 cr.
The investigation also revealed that Oppo India had made provisions for payment of “Royalty” and “Licence Fee” to various multinational companies, including those based in China, against the use of proprietary technology/brand/IPR license. However, the said royalty and licence fees paid by Oppo India were not added to the transaction value of the goods imported by them, in violation of Section 14 of the Customs Act, 1962. The alleged duty evasion by Oppo India on this account was Rs 1408 cr.
According to the DRI statement, a sum of Rs 450 cr has been voluntarily deposited by Oppo India as partial differential customs duty short paid by it.