Tax Evasion: DRI unearths Customs Duty Evasion of Rs.4389 crore by Oppo India

Tax Evasion: DRI unearths Customs Duty Evasion of Rs.4389 crore by Oppo India The Directorate of Revenue Intelligence (DRI) issued a Rs.4,389 crore show cause notice on Oppo India for allegedly evading customs duty by wrongfully availing exemption benefits. During an investigation pertaining to M/s Oppo Mobiles India Private Limited (hereinafter referred to as ‘Oppo India’), a subsidiary company of “Guangdong Oppo Mobile Telecommunications Corporation Ltd”, China (hereinafter referred to as ‘Oppo China’), the Directorate of Revenue Intelligence (DRI) has detected Customs duty evasion of around Rs.4,389 crore. In India, Oppo India manufactures, assembles, wholesale trades, and distributes mobile devices and their related accessories. Oppo India offers a variety of mobile phone brands, such as Oppo, OnePlus, and Realme. Searches carried out by DRI during the course of the investigation at Oppo India's office location and the homes of key management personnel resulted in the recovery of incriminating evidence indicating wilful misdeclaration in the description of specific items imported by Oppo India for use in the manufacture of mobile phones. Oppo India erroneously claimed duty exemption benefits of Rs 2,981 crore that they weren't qualified for as a result of this misstatement. Among those questioned were senior management staff and domestic suppliers of Oppo India, who in their voluntary testimonies accepted the submission of an incorrect description to the Customs Authorities at the time of import. Investigations further showed that Oppo India had made arrangements for the payment of "Royalty" and "Licence Fee" to a number of international corporations, including those with offices in China, in lieu of using their exclusive technology, brand, or intellectual property, among other things. In breach of Section 14 of the Customs Act of 1962 read with Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007, the aforementioned "Royalty" and "Licence Fees" paid by Oppo India were not included in the transaction value of the goods they imported. M/s Oppo India is accused of evading taxes on this account to the tune of Rs. 1,408 crore. Oppo India has voluntarily contributed Rs. 450 crore as partial differential Customs duty short paid by them. Following the conclusion of the investigation, Oppo India was served with a Show Cause Notice requesting payment of Rs. 4,389 crore in customs duty. The aforementioned Notice also suggests appropriate fines for Oppo China, Oppo India, and its personnel in accordance with the Customs Act of 1962.