Oppo India Evaded Customs Duty Worth Rs 4,389 Cr: DRI

The Ministry of Finance on Wednesday said that during an investigation, the Directorate of Revenue Intelligence (DRI) detected customs duty evasion of around Rs 4,389 crore by Oppo India. 

The ministry in a statement said that in an investigation pertaining to M/s Oppo Mobiles India (Oppo India), a subsidiary company of Guangdong Oppo Mobile Telecommunications, China, the Directorate of Revenue Intelligence (DRI) has detected customs duty evasion of around Rs 4,389 crore. 

"During the course of the investigation, searches were conducted by DRI at the office premises of Oppo India and residences of its key management employees, which led to the recovery of incriminating evidence indicating wilful misdeclaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones," it said. 

The statement added that this misdeclaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to Rs 2,981 crore. 

"Among others, senior management employees and domestic suppliers of Oppo India were questioned, who in their voluntary statements accepted the submission of wrongful description before the customs authorities at the time of import," as per the statement.

The investigation also revealed that Oppo India had remitted and made provisions for payment of ‘Royalty’ and ‘Licence Fee’ to various multinational companies, including those based in China, in lieu of the use of proprietary technology, brand, IPR license etc. 

"The said ‘Royalty’ and ‘Licence Fees’ paid by Oppo India were not being added in the transaction value of the goods imported by them, in violation of Section 14 of the Customs Act, 1962, read with Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007. The alleged duty evasion by M/s Oppo India on this account is Rs. 1,408 crore," it said. 

Also, a sum of Rs 450 crore has been voluntarily deposited by Oppo India, as partial differential customs duty short paid by them.

Meanwhile, a show-cause notice has been issued to Oppo India demanding customs duty amounting to Rs. 4,389 crore. 

The said notice also proposes relevant penalties on Oppo India, its employees and Oppo China, under the provisions of the Customs Act, 1962.