Customs tax evasion by Oppo India worth Rs 4,389 billion claims DRI

Instead of employing proprietary technology, "Oppo India had remitted provisions for payment of "royalty" and "licencing fee" to serve global corporations, including those based in China."

Oppo India was issued a Rs 4,389 crore show cause notice by the Directorate of Revenue Intelligence(DRI) on July 8 for supposedly evading customs duty by improperly claiming exemption privileges.

Searches by DRI during the investigation at Oppo India's office locations and the homes of key management personnel, resulted in the recovery of incriminating evidence indicating wilful misdeclaration in the description of some items imported by Oppo India for use in the manufacture of mobile phones, according to a PIB statement release.

"Oppo India improperly claimed duty exemption benefits totaling Rs 2,981 crore due to this misstatement," stated the release issued on Wednesday.

"In contravention of Section 14 of the Customs Act of 1962, the aforementioned "royalty" and "licencing fees" paid by Oppo India were not included in the transaction value of the commodities they imported. The mobile manufacturer evaded taxes on this account to the tune of Rs 1,408 crore," claimed the release.

Instead of employing proprietary technology, "Oppo India had remitted provisions for payment of "royalty" and "licencing fee" to serve global corporations, including those based in China," added the statement.

A voluntary deposit of Rs 450 crore has been made by Oppo India as partial differential customs duty short paid by them. Once the inquiry was complete, Oppo has been sent a show cause notice asking for the payment of customs duties of Rs 4,389 crore.

The aforementioned notice also suggests appropriate fines for Oppo China, Oppo India and its employees under the 1962 Customs Act.

The statement explained that, "senior management staff and domestic suppliers of Oppo India were among those questioned. In their voluntary statements, they admitted to submitting a false description to the customs authorities at the time of import."

Oppo India produces, assembles, wholesale trades, and distributes mobile phones and accessories all throughout the country.  It is the Indian subservient of a Chinese company, handling numerous brands including Oppo, OnePlus and Realme.