Chinese Handset Manufacturing Companies Xiaomi, Oppo, Vivo, Oneplus and Lenovo under Investigation for alleged evasion of GST and Customs Duties; says Minister of Electronics and IT

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As per the latest update in Parliament, the Indian government reported that Chinese handset manufacturers, including Xiaomi, Realme, Oppo, Vivo, and Oneplus, have avoided paying Goods and Services Tax (GST) amounting to Rs 1,108.98 crore and custom duties totaling Rs 7,966.09 crore over the last five years until 2023-24.

The Minister for State of Electronics and Information Technology, Rajeev Chandrasekhar, revealed that investigations have been launched against these companies for the mentioned tax evasions. The data regarding the evasion of Rs. 1,108.98 crore in GST and Rs. 7,966.09 crore in customs duties covers the period from 2017-18 to 2023-24 (up to July 1).

The minister also revealed that the combined turnover of major Chinese mobile handset brands in India during the financial year 2022 amounted to Rs 1.5 lakh crore. These brands directly employed over 75,000 people in manufacturing and an additional 80,000 people in sales and operations.

Further stated that the companies are urged to submit the appropriate tax amount, interest, and penalties as needed. The data was based on a query presented by Rajya Sabha Member Narain Dass Gupta.

Regarding GST evasion, the minister reported that the company has evaded Rs. 48.25 crore, and some part of this evasion is still under investigation. Currently, the government has managed to recover Rs. 51.25 crore from the company for the same evasion. Lenovo has also been accused of GST evasion amounting to Rs 42.36 crore. However, as of now, no recoveries have been made in this regard, stated the Minister of Electronics and IT in the parliament.

Coming to Customs Duty evasion, Xiaomi has allegedly avoided paying customs duties of Rs 89 lakh, according to the minister, who provided an accurate explanation. The company’s case has been ended as a consequence of their payment of the overdue sum, Rs. 31,77,721 in interest, and Rs. 13,30,143 in penalties.

The same company has also avoided paying Rs. 653.02 crore rupees in customs duty during the 2019–20 fiscal year, paying merely 46 lakh. The government has given the corporation a show-cause notice regarding the remaining shortfall in response to this avoidance.

Oppo Mobile India evaded customs duty amounting to Rs. 4,389 crore, but only paid Rs. 450 crore towards the outstanding amount and Vivo India also evaded customs duty amounting to Rs. 2,217 crore, but only made a payment of Rs. 72 crore towards the evaded amount in the Financial Year 2019-20.

Altogether, Vivo has been alleged to have evaded Rs. 2,875 crore in customs duties during the financial years 2021 and 2023. However, the government has managed to recover only Rs. 117 crore so far, according to the minister’s statement.

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