New Delhi: The Directorate of Revenue Intelligence (DRI) has issued three show-cause notices to Xiaomi Technology India Pvt.
In a detailed press statement, the Finance Ministry said that an investigation was launched by the DRI against Xiaomi India and its contract manufacturers to evade customs duty through undervaluation.
“During the investigation, a search was conducted by the DRI at the premises of Xiaomi India, which led to the recovery of incriminating documents indicating that Xiaomi India was remitting royalties and license fees to Qualcomm USA and Beijing Xiaomi Mobile Software Co. Ltd, Under contractual obligation,” according to the media statement.
The government further said that one of the directors of Xiaomi India has confirmed the said payment.
“During investigation, it further emerged that the “royalties and license fees” paid by Xiaomi India to Qualcomm USA and Beijing Xiaomi Mobile Software Co. Ltd are not to be added to the transaction value of Xiaomi India and the goods imported by it. had been contract makers,” it added.
“Evidence collected during the investigation by the DRI indicated that neither Xiaomi India nor its contract manufacturer Xiaomi India and its contract manufacturers included the amount of royalty paid by Xiaomi India in the assessable value of goods imported by it. which is a violation of section. 14 of the Customs Act, 1962 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. By not adding “royalty and license fee” to the transaction value, Xiaomi India was evading customs duty by being the beneficial owner of such imported mobile phones. , parts and components thereof,” explained the statement.
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