Xiaomi, Oppo may face fine of Rs 1000 crore for violating income tax laws


The Income Tax Department claimed that smartphone makers Xiaomi and Oppo have violated tax laws, and could be fined Rs 1000 crore. On December 21, the Income Tax Department had raided the locations of Chinese smartphone companies and their subsidiaries across the country in Delhi and 11 other states. The department found several important documents which showed that the companies were openly violating the Income Tax Act in India.

The Income Tax Department said, “It has been revealed in the raids that both the big companies have remitted amount in the form of royalty, which is more than Rs 5,500 crore, quoting themselves and group companies located abroad. The statement further read, “These companies did not comply with the disclosure of transactions under the Income Tax Act 1961. Such mistake renders them liable to penal action.”

The Income Tax Department conducted raids in West Bengal, Andhra Pradesh, Bihar, Rajasthan, Tamil Nadu, Assam, Maharashtra, Delhi NCR, Karnataka, Madhya Pradesh and Gujarat last week. This action of the Income Tax Department has exposed two big smartphone companies like Xiaomi and Oppo sending money abroad in the form of royalty to their group companies. Further, remittances of more than Rs 5,500 crore have been detected, which could not be reconciled with the evidence and facts found during the search operation.

The search operation also revealed the method of procuring the components to make the smartphone. The department claimed that Xiaomi and Oppo had not disclosed the transaction as per the provisions of the Income Tax Act 1961, which would now result in a fine of 1000 crores.

Xiaomi, Oppo may face a fine of Rs 1000 crore for violating income tax laws.

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