Chinese smartphone brands are under probe in India

India has requested key Chinese smartphone brands such as Xiaomi, Oppo, Vivo, and PC maker Lenovo to pay outstanding tax dues and is pursuing recoveries with the brands' owners, after…

By Nivedita Bangari

July 22, 2023

2 min read

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India has requested key Chinese smartphone brands such as Xiaomi, Oppo, Vivo, and PC maker Lenovo to pay outstanding tax dues and is pursuing recoveries with the brands’ owners, after initiating investigations into alleged GST and impost levy evasion over many years.

In response to an unstarred question in the Rajya Sabha, Rajeev Chandrasekhar, minister of state for electronics and information technology, detailed the amount of GST and customs allegedly evaded by the top Chinese smartphone makers from 2017 to July 2023. The response went into depth on the amounts recovered and the actions taken.

According to the written response to the upper house of parliament, Xiaomi India was issued multiple show-cause letters for customs duty evasion in FY 20, FY 21, and FY 22, totaling Rs 682.51 crore, of which the government recovered Rs 10.76 crore.

In FY 20, the Chinese smartphone company additionally paid Rs 31.77 lakhs in interest and a penalty of Rs 13.3 lakhs for evading customs tax.

The company is also being examined for GST evasion of Rs 168.63 crore from 2017 to July 2023, with the government recovering Rs 82.04 crore so far, according to the minister. He further stated that Oppo had avoided customs duty to the tune of Rs 4403.27 in fiscal years 20 and 21, with the government recovering Rs 476.79 crore from the firm and issuing show cause notices. The government also discovered GST evasion by Oppo to the tune of Rs 683.04 and recovered Rs 738.04 crore.

Vivo, another Chinese smartphone manufacturer in the top five in India, has been accused of dodging Rs 2875 crore in customs charges in fiscal years 21 and 23, with the government recovering Rs 117 crore from the business. Regarding GST, the minister stated that the company evaded Rs 48.25 crore, with a portion of the evasion still being processed.

The government has so far recovered Rs 51.25 crore from the company. Lenovo, which also owns the Motorola brand in India, has been charged with GST evasion to the tune of Rs 42.36 crore, albeit no recoveries have been made.

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