India says Vivo’s local division evaded more than $280 million in import tax

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India’s anti-smuggling agency said the local division of phone maker Vivo evaded more than $280 million in customs duties, about a month after the country’s anti-money laundering agency raided the Chinese company’s local offices.

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The Treasury Department said on Wednesday that its Tax Intelligence Agency had uncovered “damaging evidence pointing to intentional misrepresentation of certain items” imported by Vivo’s India division during searches of its factories.

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This resulted in “misuse by the company, ministry and said in a press statement.

The department issued a Cause Notice to Vivo India upon completion of the investigation and demanded payment of more than $280 million (Rs. 2,217 crore) in customs duties under the Customs Act 1962, the ministry added.

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The Treasury also said that Vivo India “voluntarily contributed” $7.5 million as part of its differential customs duty liability.

TechCrunch has reached out to Vivo India for comment on this and will update this space when the company responds.

The latest statement from the Treasury follows a similar Vivo-sibling Oppo customs duty evasion case it was made public last month. In this incident, the Indian subsidiary of a Chinese company was charged with $550 million in customs duty evasion.

Last month, the Enforcement Directorate, India’s anti-money laundering agency, also raided dozens of Vivo operations and manufacturing sites in several states on charges of money laundering. At the time, the agency seized $58.7 million from 119 company bank accounts.

Chinese Embassy in India criticized the earlier move on Vivo. The embassy said such “frequent investigations” by local subsidiaries of Chinese firms “hinder the improvement [the] business environment” in the country and “undermines the confidence and willingness” of global businesses to invest in and operate in the South Asian market.

Vivo commented on the raid and said it was “committed to full compliance with the laws” in the country. Similarly, Oppo has responded to the allegation of customs evasion and said it will “take appropriate steps as may be required in this regard.”

Along with Vivo and Oppo, which are owned by Guangzhou-based BBK Electronics, Xiaomi has recently come under scrutiny from the Indian government. Recently, the Department of Corrections confiscated $725 million from an Indian subsidiary Chinese company, accusing the phone manufacturer of violating the country’s currency laws.

However, Xiaomi denied the allegations. Executive faced threats of “physical violence” during the investigation, Reuters previously reported. The Beijing-based company also appealed the law enforcement agency’s decision to the Karnataka High Court. A decision in this case is currently pending.


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