In an ongoing investigation of duty evasion pertaining to M/s Oppo Mobiles India Private Limited, a subsidiary company of Guangdong Oppo Mobile Telecommunications Corporation Ltd, China, the Directorate of Revenue Intelligence (DRI) has detected Customs duty evasion of Rs 4,389 crore.
Oppo India, engaged in the business of manufacturing, assembling, wholesale trading, distribution of mobile handsets and accessories, deals in various brands of mobile phones, including Oppo, OnePlus and Realme.
The DRI conducted searches at the office premises of Oppo India and the residences of its key management employees, which led to the recovery of incriminating evidence indicating willful misdeclaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones. “Mis-declaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India, amounting to Rs 2,981 crore,” claimed a senior DRI official on condition of anonymity.
Among others, senior management employees and domestic suppliers of Oppo India were questioned, and in voluntary statements, they accepted the submission of wrongful description before the customs authorities at the time of import.
Investigation has revealed that Oppo India had remitted and made provisions for payment of ‘royalty’ and ‘licence fees’ to various multinational companies, including those based in China, in lieu of the use of proprietary technology, brand and IPR licence.
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, 1962, read with Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
A sum of Rs 450 crore was voluntarily deposited by Oppo India as partial differential customs duty short paid by them.
The DRI, after completion of the investigation, issued a show-cause notice to Oppo India, demanding customs duty amounting to Rs 4,389 crore. The show-cause notice also proposed relevant penalties on Oppo India, its employees and Oppo China, under Customs provisions.
