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Oppo India evaded customs duty worth Rs 4389 crore, DRI probe reveals

The DRI informed that incriminating evidence pointed towards wilful misdeclaration in the description of certain items that Oppo India had imported for use in the manufacture of mobile phones. For now, Oppo India has voluntarily paid a partial differential Customs duty of Rs 450 crore, which was short-paid by them. 

Oppo India evaded customs duty worth Rs 4389 crore, DRI probe reveals
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New Delhi, First Published Jul 13, 2022, 3:35 PM IST

Chinese smartphone maker Oppo Mobiles India Private Limited evaded Rs 4,389 crore in customs duty, the Directorate of Revenue Intelligence has unearthed after an investigation. 

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Oppo India is a subsidiary company of China-based Guangdong Oppo Mobile Telecommunications Corporation Ltd that sells smartphones under the brands Oppo, OnePlus and Realme.

The DRI, in a statement, informed that incriminating evidence pointed towards wilful misdeclaration in the description of certain items that Oppo India had imported for use in the manufacture of mobile phones. This evidence surfaced follwing searches conducted by the agency at Oppo India's office premises and key management staff's residences.

The agency highlighted that the misdeclaration led to wrongful availment of ineligible duty exemption benefits amounting to Rs 2,981 crore. When questioned, Oppo India's domestic suppliers and senior management employees admitted to making wrong description submissions before the Customs Authorities at the time of import.

The DRI further said that various multinational companies, including those based in China, received payments of 'Royalty' and 'Licence Fee' by Oppo India in lieu of the use of proprietary technology/brand/IPR license etc. 

The DRI claimed that the 'Royalty' and 'Licence Fees' paid by Oppo India were not being added to the transaction value of the goods imported by them. This, the agency said, violated Section 14 of the Customs Act, 1962 and Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007. This caused a duty evasion worth Rs 1,408 crore.

For now, Oppo India has voluntarily paid a partial differential Customs duty of Rs 450 crore, which was short-paid by them. 

This is after the DRI dispatched a show-cause notice to Oppo India demanding Customs duty amounting to Rs 4,389 crore. The notice also proposes relevant penalties under the Customs Act, 1962 on Oppo India, its employees and Oppo China.

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