New Delhi: According to the Directorate of Revenue Intelligence (DRI) of the Finance Ministry, a notice worth Rs 653 crore was sent to handset maker Xiaomi on Wednesday for alleged tax evasion in India.
According to reports, the DRI had launched an investigation against Xiaomi and its contract manufacturers after they came to know that it was evading tax through undervaluation.
“After completion of investigation by DRI, three show cause notices have been issued to M/s Xiaomi Technology India Pvt Ltd for the period 01.04.2017 to 30.06.2020 demanding and recovery of fee of Rs 653 crore, news agency PTI According to a report by the Ministry of Finance, under the provisions of the Customs Act, 1962, the Finance Ministry said in a statement.
“Statements of key individuals from Xiaomi India and its contract manufacturers were recorded, during which one of the directors of Xiaomi India confirmed the said payment,” the finance ministry said.
During the investigation, searches were conducted at the premises of Xiaomi India by DRI, 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, a contractual obligation Under, the PTI report has been added.
It further emerged that the “royalties and license fees” paid by Xiaomi India to Qualcomm USA and Beijing Xiaomi Mobile Software, China (a related party of Xiaomi India) shall not be added to the transaction value of Xiaomi India and the goods imported by it. Had been. contract manufacturers, it added.
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