fbpx
  Previous   Next
HomeBusinessDirectorate of Revenue Intelligence To Recover Rs 653 Crore From Xiaomi

Directorate of Revenue Intelligence To Recover Rs 653 Crore From Xiaomi

The Directorate of Revenue Intelligence (DRI) on Wednesday said that it has issued three show cause notices to cell phone company Xiaomi Technology India Private Limited for the recovery of customs duty amounting to Rs 653 crore for the period 01.04.2017 to 30.06.2020, under the provisions of the Customs Act, 1962.

A senior DRI official said that based upon intelligence that cell phone company Xiaomi Technology India Private Limited (Xiaomi India) was evading customs duty by way of undervaluation, an investigation was initiated against it and its contract manufacturers.

The DRI official said that during the investigation, searches were conducted at the premises of Xiaomi India, which led to the recovery of incriminating documents.

“The incriminating documents seized from the office of Xiaomi indicated that the company was remitting royalty and license fee to Qualcomm USA and to Beijing Xiaomi Mobile Software Co Ltd, under contractual obligation. Statements of key persons of Xiaomi India and its contract manufactures were recorded, during which one of the directors of Xiaomi India confirmed the said payments,” said the DRI official.

The DRI official said that the “royalty and license fee” paid by Xiaomi India to Qualcomm USA and to Beijing Xiaomi Mobile Software Co Ltd, China (related party of Xiaomi India) were not being added to the transaction value of the goods imported by Xiaomi India and its contract manufacturers.

DRI official said that Xiaomi India is engaged in the sale of MI brand mobile phones and these mobile phones are either imported by Xiaomi India or assembled in India by importing parts and components of mobile phones by contract manufacturers of Xiaomi India. The MI brand mobile phones manufactured by the contract manufacturers are sold exclusively to Xiaomi India, in terms of the contract agreement.

Evidence gathered during the investigation by the DRI indicated that neither Xiaomi India nor its contract manufactures were including the amount of royalty paid by Xiaomi India in the assessable value of the goods imported by it and its contract manufacturers, which is in violation of Section 14 of the Customs Act, and Customs valuation (determination of the value of imported goods) Rules 2007.

“By not adding royalty and license fee into the transaction value, Xiaomi India was evading Customs duty being the beneficial owner of such imported mobile phones, the parts and components thereof,” said the DRI official.

More News

Bhagwant Mann Challenges CM Channi To Fight Against Him From Dhuri, Punjab

Bhagwant Mann has challenged Punjab Chief Minister and Congress leader Charanjit Singh Channi to fight against him from the Dhuri seat in the upcoming...

BJP Accuses Congress of Spreading Hatred In Punjab

Union Minister and Punjab BJP election in-charge Gajendra Singh Shekhawat has demanded action from the Election Commission, accusing the Congress of creating an atmosphere...

896 Indians Amongst 1,214 Players Registered For IPL 2022 Auction

After the registration for the Indian Premier League (IPL) 2022 player auction ended on January 20, the tournament said in an official advisory that...

RELATED NEWS

Sensex Slips 600 points, Nifty Ends Below 17,800

Benchmark indices ended lower on January 20 on the back of continues profit booking, with Nifty closing below 17800. At close, the Sensex was down...

Microsoft-Activision Blizzard Deal May Face Scrutiny By Antitrust Enforcers In US

Microsoft Corporations proposed $75 billion acquisition of Activision Blizzard Inc. is likely to receive a close look from antitrust enforcers in the US and...

Digital Payments Adoption Accelerating: RBI-Digital Payments Index

There has been a significant growth in adoption as well as deepening of digital payments across the country, showed the Reserve Bank of India...