Parliament likely to witness stormy session over violation of law of the land by Chinese companies

Chinese tech-majors Xiaomi Technology and Oppo are under the lens of the Income Tax Department and Directorate of Revenue Intelligence (DRI) in serious charges of tax evasion and diversion of funds to China. Sources say that the Enforcement Department (ED), Department of GST and Competition Commission of India (CCI) are keeping a close watch on the movements of both the IT Department as well as the DRI and these three agencies could step into the investigations very soon, making matters worse for the already troubled Chinese companies.

The upcoming budget session of Parliament is likely to witness a huge uproar from law makers in respect to openly flouting rules and showing of disrespect towards Indian laws by these Chinese companies. These matters are likely to be raised by Members of Parliament, cutting across party lines. The Union Finance Minister, Mrs. Nirmala Sitharaman will have to come out with a substantial statement over action taken against the corrupt practices of these companies and action taken by Indian agencies in this regard.

Earlier, IT Department had issued a demand of ₹653 crore to Xiaomi Technology India Pvt. Ltd. for alleged violation of Customs Act saying the company did not include royalty and license fee in the value of its imports.

Finance ministry issued a statement saying that by not adding “royalty and licence fee” into the transaction value, Xiaomi India was allegedly evading Customs duty as the beneficial owner of such imported mobile phones and parts. The investigation was carried out by the Directorate of Revenue Intelligence (DRI).

“After completion of the investigation by the DRI, three show-cause notices have been issued to Xiaomi Technology India Pvt. Ltd. for demand and recovery of duty amounting to Rs. 653 crore for the period 1 April 2017 to 30 June 2020, under the provisions of the Customs Act, 1962,” the ministry said in the statement.

During the investigation, searches were conducted by the DRI at the premises of Xiaomi India, which led to the recovery of incriminating documents indicating that Xiaomi India was remitting royalty and licence fee to Qualcomm USA and to Beijing Xiaomi Mobile Software Co. Ltd., a related party, under contractual obligation, the ministry statement had said.