The Directorate of Revenue Intelligence (DRI) has served a showcause notice on Oppo India demanding Customs duty amounting to ₹4,389 crore, the agency said on Wednesday. The notice also proposes penalties on the company, its employees and Oppo China under the provisions of the Customs Act.
Oppo Mobiles India Private Limited is a subsidiary company of China-based Guangdong Oppo Mobile Telecommunications Corporation Limited. It is engaged in the business of manufacturing, assembling, wholesale trading, distribution of mobile handsets and accessories across the country. The company deals in various brands of mobile phones, including Oppo, OnePlus and Realme.
The DRI had earlier conducted searches on the office premises of Oppo India and residences of its key management employees, which led to the seizure of “incriminating” evidence indicating alleged wilful mis-declaration in the description of certain items imported by the company for use in the manufacture of mobile phones.
“This mis-declaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to ₹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,” said the agency.
The DRI probe revealed that Oppo India had allegedly remitted or 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, intellectual property 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, read with Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007. The alleged duty evasion by Oppo India on this account is ₹1,408 crore,” the agency said.
Oppo India has voluntarily deposited a sum of ₹450 crore as partial differential Customs duty short-paid by them.
Meanwhile, the Oppo India said in a statement, “We have a different view on the charges mentioned in the SCN. We believe it's an industry-wide issue many corporates are working on. OPPO India is reviewing the SCN received from DRI, and we are going to reply the notice, presenting our side, and will be working further with the related government departments. OPPO India is a responsible corporate and believes in prudent corporate governance framework. OPPO India will take appropriate steps as may be needed in this regard including any remedies provided under the law.”
