Xiaomi was exposed to about 558 million yuan in tax evasion in India

The Ministry of Finance of India stated on Wednesday that it had issued three notices to Xiaomi Technology India Pvt. (Xiaomi Technology India Pvt.) for recovering 6.53 billion Indian rupees (approximately 558 million). Yuan Renminbi) tax.

According to The Paper, Xiaomi responded that night that Xiaomi insisted on operating in compliance with laws and regulations on a global scale and abided by the relevant laws and regulations of the place of operation.

Xiaomi stated that the relevant Indian authorities required Xiaomi to pay the import link tax related to royalties between April 1, 2017, and June 30, 2020, which has nothing to do with Xiaomi’s recent business, and the official statement Not the final result.

The Ministry of Finance of India stated that Xiaomi India remitted royalties and license fees to Qualcomm and Xiaomi Mobile Software. These fees were not included in the transaction value of its imported goods. The statement stated that Xiaomi and its contract manufacturers have not included the royalties of imported MI-branded mobile phones and their parts into the assessable value of the product.

 Xiaomi spokesperson said in response to an e-mail inquiry: “At Xiaomi India, our top priority is to ensure that we comply with all Indian laws. We are currently reviewing the notice in detail. As a responsible company, We will support the authorities with all necessary documents".

According to The Indian Express report, the Ministry of Finance of India stated that the evidence collected during the investigation by the Tax Intelligence Agency (DRI) showed that neither Xiaomi India nor its contract manufacturers included the royalties paid by the company into the company and its contract manufacturing. The value of the goods imported by the merchant should be assessed, which violates the customs law.

It added that Xiaomi India is evading tariffs because it did not include “royalty and license fees” in the transaction value and that it is the actual owner of these imported mobile phones and their parts.

The Ministry of Finance of India said: “After DRI completed its investigation, it has issued three notices showing the reasons to M/s Xiaomi Technology India Private Limited, requesting that in accordance with the provisions of the Customs Act of 1962, between April 1, 2017 and April 1, 2017. During June 30, 2020, a duty of 653 crore rupees was recovered."

The investigation further revealed that Xiaomi India is engaged in the sale of MI brand mobile phones, which are imported by the company or assembled in India by contract manufacturers of Xiaomi India through imported mobile phone components.

According to the contract agreement, MI brand phones produced by contract manufacturers are only sold to Xiaomi India.

The intelligence received by DRI officials showed that M/s Xiaomi Technology India Private Limited (Xiaomi India) evaded tariffs through underestimation, and then DRI conducted an investigation into the company and its contract manufacturers.

In the course of the investigation, DRI searched the office of Xiaomi India and discovered the problem of remitting patent fees and license fees to Qualcomm and Beijing Xiaomi Mobile Software Co., Ltd.

The statements of key personnel of Xiaomi India and its contract manufacturers were recorded, during which a director of Xiaomi India confirmed the payment.

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