New Delhi, January 28
Beijing has expressed concern over raids earlier this month on Chinese mobile phone companies in India and sought a “fair, transparent and non-discriminatory environment” for Chinese companies.
Concern over the “business environment” in India by Gao Feng, spokesperson for the Ministry of Commerce, was expressed after the Department of Tax Intelligence (DRI) launched an investigation into the tax and income issues of Chinese mobile companies such as Oppo, Xiaomi, and OnePlus.
The DRI had imposed a preliminary demand of Rs 653 crore on Chinese mobile phone giant Xiaomi for failing to include royalty payments in the taxable value of goods it imported over three years from 2017 to 2020. It had claimed acting on intelligence that Xiaomi India was evading customs duties by undervaluation.
His research uncovered incriminating documents indicating that Xiaomi was paying royalties and license fees to Qualcomm US and Beijing Xiaomi Mobile Software. But this was not added to the taxable value of goods imported by Xiaomi India and its subcontractors.
Xiaomi said it was being asked to pay import taxes on royalties and license fees that are unrelated to its current business while noting that this was not a final decision .
“China has contributed to India’s economic development and created a lot of local jobs, and we hope India can provide a fair, transparent and non-discriminatory environment for Chinese businesses,” Gao said.
Calling the DRI investigation an “irregular tax audit”, China’s Global Times newspaper said Chinese mobile phone brands are very popular in the Indian market and their market share far exceeds that of local Indian brands. Xiaomi led the Indian smartphone market shipments in the third quarter of 2021 with a 22% share, according to the latest research from Counterpoint. Total Indian smartphone shipments topped 52 million units in the third quarter, and although Xiaomi was in the lead, it said citing an Indian survey.
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