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Tag: Tax Evasion

  • Chinese smartphone brands Oppo, Vivo India & Xiaomi under tax sleuths’ lens

    Chinese smartphone brands Oppo, Vivo India & Xiaomi under tax sleuths’ lens

    Mumbai: Chinese smartphone makers have once again come under the scanner of Indian agencies for cases of alleged tax evasion. Notices have been issued to Oppo, Vivo India and Xiaomi, finance minister Nirmala Sitharaman informed Rajya Sabha recently. The three Chinese mobile phone companies, between them, hold a major share of the Indian smartphone market.

    The Finance Minister said that the department of revenue intelligence (DRI) has issued a notice to Oppo for a total customs duty of Rs 4,389 crore. This is on the grounds that misdeclaration of certain goods leads to a short payment in customs duty.

    The duty evasion is about Rs 2,981 crore, Sitharaman said replying to a question in the Upper House.

    “Undervaluation of imported goods for the purpose of payment of customs duty, that we think is an evasion of Rs 1,408 crore,” she said.

    She stated that they came voluntarily to deposit Rs 450 crore, much less than the demand of Rs 4,389 crore.

    Regarding the other companies, she said Xiaomi, which deals with assembling MI mobile phones, has been issued three show-cause notices.

    “The approximate duty liability there is about Rs 653 crore. For the three show cause notices that have been issued, they have deposited only Rs 46 lakh,” the minister said.

    She informed Rajya Sabha that a demand notice has been issued for Rs 2,217 crore for which they have deposited Rs 60 crore as a voluntary deposit.

    “Besides these, the ED is looking at 18 companies that were established by the same group as Vivo, and there they have voluntarily remitted Rs 62 crore as deposits, but the parent company outside of India has total sales of 1.25 lakh crore.

    “Of the Rs 1.25 lakh crore total sales, Vivo has transferred through these 18 companies huge amounts of funds, and it is believed that Vivo India has, in turn, remitted 0.62 lakh crore to its parent company, which is outside India,” Sitharaman said.

    In her written reply, the finance minister said a show cause notice demanding Rs 4,403.88 crore has been served on Oppo Mobiles India based on the investigation conducted by the directorate of revenue intelligence (DRI).

    Five cases of customs duty evasion have been booked against Xiaomi Technology India, she said.

    “During the period 2019 to 2022, in respect of the central board of indirect taxes & customs (CBIC), cases against 43 other such companies have been booked.”

    “‘As regards to the central board of direct taxes (CBDT), investigation directorates have undertaken search and seizure actions in cases of five groups pertaining to the telecom sector, in which tax evasion has been detected,” Sitharaman added.

    Meanwhile, the market share of these three brands, which make up the top five smartphone brands in India, has been steadily growing, despite the scrutiny. Xiaomi remained the market leader in 2022 with a share of 24 per cent, followed by Vivo with 18 per cent share and Oppo with a ten per cent share, according to a report by Cyber Media Research (CMR). The three brands, along with Realme and Korean smartphone major Samsung, account for nearly three quarters of India’s smartphone market.

  • Bombay HC grants no relief to ByteDance in tax evasion case

    Bombay HC grants no relief to ByteDance in tax evasion case

    KOLKATA: TikTok’s parent company ByteDance continues to remain in limbo as Bombay high court granted no relief in the case where the company challenged Indian authorities’ decision to freeze the its bank accounts.

    According to a Reuters report, the court heard the plea on Wednesday. Despite ByteDance counsel Prakash Shah submitting that the company was bleeding and needed to withdraw funds for operational expenditures like staff salaries and rent, the court gave no relief.

    Shah also added that four of the company’s bank accounts have been frozen. The next hearing in the matter is set for 6 April.

    According to media reports, In mid-March, authorities ordered ByteDance India's accounts at Citibank and HSBC to be blocked because of alleged evasion of certain taxes in online advertising dealings between the ByteDance unit in India and its parent entity in Singapore, TikTok Pvt Ltd. The Chinese tech company moved to court asking to quash the directive as it fears that the move will hit Indian operations hard.

    In January 2021, ByteDance decided to cut down its Indian workforce amid the uncertainty over its biggest business TikTok’s future in India. Following the political conflict between India and China, the Centre imposed a ban on a number of Chinese apps including short-video app TikTok last June.

  • ByteDance moves to court over blocking of bank accounts in India

    ByteDance moves to court over blocking of bank accounts in India

    KOLKATA: Indian authorities have reportedly blocked bank accounts of ByteDance, the parent company of TikTok. The Chinese tech company has moved to court asking to quash the directive as it fears that the decision will hit Indian operations hard.

    According to a Reuters report, at least two bank accounts held by ByteDance have been frozen due to alleged tax evasion. Quoting sources, the report mentioned that ByteDance India’s accounts in Citibank and HSBC Bank were ordered to be blocked in mid-March.

    Moreover, the authorities also directed the abovementioned banks to stop ByteDance India from withdrawing funds from any other bank accounts linked to its tax identification number. The Bombay high court has listed the case between ByteDance and the Indian government for hearing on Wednesday.

    “At ByteDance, we are committed to abiding by local laws and regulations. While we disagree with the decision of the tax authority in this matter, we will extend our full cooperation to the government," ByteDance said in a statement as quoted by several reports.

    In January 2021, ByteDance decided to cut down its Indian workforce amid the uncertainty over its biggest business TikTok’s future in India. Following the political conflict between India and China, the Centre imposed a ban on a number of Chinese apps including short-video app TikTok last June.

  • Tax evasion investigations drag Chinese entertainment shares down

    Tax evasion investigations drag Chinese entertainment shares down

    HANGZHOU, CHINA: The television industry in China – which is regulated by the State Administration of Radio Film & Television (Sarft) – is going through its own turmoil, regulatory restrictions aside.

    Monday saw stock of many media companies involved in production drop between six and 10 per cent. Huayi Brothers Media, Zheijan g Talent Television & Film Co,   Spearhead Integrated Marketing Communication, Huawei Culture Co, Ciwen Media Co – all saw market capitalizations vanish even as the media index fell 1.3 per cent. This is a near four year low.

    The reason: the Chinese tax authorities are investigating whether the country’s media and entertainment firms are finding innovative ways to evade taxes, especially as far as payment to top talent is concerned (sounds familiar to us Indians right?)

    It all started last week when a former TV host Cui YongYuan posted  screenshots of several employment contracts (with names blacked out) on networking site Sino Weibo. He accused actors of signing dual or ying yang contracts with production studios.  Cui attacked Chinese star Fan Bingbing claiming she was given 10 million yuan (US$1.5 million) according to the contract which was shown to the tax authorities while she had signed another personal agreement wherein she was paid 50 million yuan for the same work.  Fan is based in Wuxi, Jiangsu province province of China and with the social media abuzz, the local tax authorities swing into action, pronouncing that they would investigate the tax evasion charge thoroughly.

    Local activists and researchers lauded the move as China has tried to regulate the alleged tax evasion abuse by top actors and talent in the past but has failed. The China Alliance for Radio, Film & Television had issued a circular in 2017 ordering producers to limit actors’ remuneration to no more than 40 per cent of the production costs, and that leading actors compensation should not exceed 70 per cent of total actors’ payments.

    The hue and cry around Cui and Fan, lead to a broader call for the Chinese tax authorities to investigate all  media and entertainment firms. Hence, the slump in share prices.

    Observers see good  in the tax evasion investigation. “Chinese media shares will be negatively influenced in the short term, but it’s a piece of good news in the medium to long term that film and TV stars will be more compliant about paying taxes and good film and TV producers will stand out,” said a representative of one the Chinese investment banking analysts to China Daily.

  • NDTV restructures biz & newsroom amidst reports of layoffs

    NEW DELHI: Buffeted by allegations of tax evasion and money laundering, which are being contested in appeal tribunals, one of India’s first private sector TV news organization NDTV has said it is reorganizing newsroom set-up and resources available to adapt to changing technologies like MoJo or mobile journalism.

    Stating that the restructuring was “not just about cost-cutting”, the Prannoy Roy-family promoted NDTV in a statement on Monday said, “Like other news broadcasters around the world, NDTV is reorganizing its newsroom and resources to focus on mobile journalism. NDTV has always been an early adapter of new technology and we are the first major network in India whose reporters are all trained in using mobile phones to shoot stories.”

    The statement comes amidst media reports that NDTV has handed pink slips to about 70 staffers, comprising mostly technical personnel and camerapersons. Outlook magazine, quoting unnamed sources, in a report on its website said on Monday that the number of “retrenched staff is likely to be between 60 and 70 of which around 35 camerapersons have been made redundant with the introduction of high-grade smartphones”.

    It must be clarified here that Indiantelevision.com could not independently verify or confirm the news on staff being laid off at NDTV.

    However, NDTV’s official statement, also given to the Bombay Stock Exchange (BSE), on Monday dropped ample hints about retrenchment of staffers owing to funds crunch.

    “This (the restructuring of business and newsroom ops to rely on MoJo) is not just about cost-cutting, though that is certainly, for us, like any other responsible business, an important factor in operations. Mobile journalism means reports are lightning-quick and much more efficiently produced, a priority for any news company,” NDTV said.

    Pointing out it would be “irresponsible” to viewers and shareholders, apart from being “archaic” to maintain decades-old templates of how to shoot and edit, NDTV defended itself on collateral damages of restructuring.

    “NDTV has long been valued for its commitment to its employees — our record on attrition across more than 20 years is testament to this and spoken of across the industry. We have ensured fair compensation for those employees affected by our restructuring,” the company stressed.

    Dwelling on the need to revamp, NDTV clarified like all businesses, broadcasting models too change and evolve and, hence, the “need to restructure” and keep pace with the digital world of journalism.

    What does MoJo mean? Live camera crews for coverage of finance minister Arun Jaitley’s briefing at Delhi’s Press Information Bureau, for example, have been replaced by a single reporter. The reporter doubles up as a journalist and cameraperson using high-end mobile phones and modern mobile networks to connect with the studio via Skype and other such similar services to cover the event or do a PTC (piece to camera, a TV jargon to explain when a TV news journalist comes on camera to report an event and answer queries from the studio).

    The news of retrenchment and business restructuring comes close on the heel of news that a tax tribunal had, reportedly, upheld claims made by the tax department on taxes not paid by NDTV, which has, however, contested the claims saying it was witch-hunt unleashed by the Modi government for standing up to media arm-twisting.

    “The court cases (relating to tax evasion) that are an attempt to punish NDTV for its award-winning objective journalism do not influence how we run and operate our newsroom. The emphasis on restructuring is rooted in the broader financial climate, our commitment to controlling costs and, most importantly, our move to consolidate on our core business, quality news content,” the statement said.

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  • Kalanithi Maran responds to court summons on SpiceJet tax evasion case

    Kalanithi Maran responds to court summons on SpiceJet tax evasion case

    NEW DELHI: In response to summons issued by a Delhi court in cases of tax evasion related to SpiceJet, of which Sun Group chairman Kalanithi Maran is non-executive chairman, the media owner embroiled in several controversies, has said that him and his company are not “tax dodgers.”

     

    Denying that any company in the Sun Group is in arrears in payment of taxes, Maran said that “there have been several occasions when tax authorities have awarded trophies and honoured Sun TV Network with citations for exemplary compliance and for topping the region in terms of highest tax payments.”

     

    “The companies of the Sun Group collectively and me in my personal capacity pay more than Rs 600 crore as taxes annually to the national exchequer,” he added.

     

    Referring to the media reports regarding SpiceJet, Maran said, “I am confident that the Honorable Courts will render justice to us.”

     

    “Given that the Sun group companies and I have been the topic of several malicious and misleading stories fed to the print media by certain people, it appears that this action too may have been motivated by ulterior motives to tarnish the image and reputation of the Sun Group and me,” he added.