The Income Tax department raided the offices and manufacturing units of Chinese smartphone-making firms— Xiaomi, Oppo, OnePlus— across the country as part of a major crackdown on mobile manufacturers and distributors in India.
According to reports, the anti-smuggling agency Directorate of Revenue Intelligence searched the plants of Foxconn India's unit, Bharat FIH and Dixon Technologies in South India.
Xiaomi's contract manufacturers include Bharat FIH and Dixon.
The raids were conducted in over 25 cities across India, including Delhi, Mumbai, Chennai, Bengaluru, Kolkata and Guwahati.
Some fintech companies' offices were also raided, according to reports. The search was based on tips about hidden income and tax avoidance. As reported, digital data on hidden income was seized in some places.
It was also reported that state investigative wings of the I-T department were unaware of the raids.
However, a senior I-T officer stated that raids are currently ongoing in multiple locations and the department will provide an update after the search, as well as seizure operations, are completed. Top executives from some of these businesses, like Xiaomi and Oppo, are being questioned.
According to Economic Times, the raids at the distribution partners of Oppo began on 21 December. Additionally, authorities are searching the homes of senior executives of these companies apart from the offices including the residences of some of their distributors.
Oppo released a statement saying: "As an invested partner in India, we highly respect and abide by the law of the land. We will continue to fully cooperate with authorities concerned as per the procedure."
Similar searches on these companies' offices were recently performed by the Enforcement Directorate (ED), and one of Oppo's distribution partners in Hyderabad was sanctioned. A source familiar with the matter, told Business Insider: "Oppo's Chinese distribution partner was recently penalised in hundreds of crores by the ED in Hyderabad.”
Meanwhile, a Xiaomi spokesperson said: “As a responsible company, we give paramount importance to ensuring that we are compliant with all Indian laws. As an invested partner in India, we are fully cooperating with authorities to ensure they have all the required information."
The operation began on 21 December evening with a surprise raid at numerous offices of Redmi, Oppo, and Foxconn's manufacturing site in Tamil Nadu’s Sunguvarchatram, near Sriperumbudur, by I-T officials.
Similar searches were carried out in India in August this year at various offices of the Chinese government-controlled telecom vendor ZTE. Top corporate executives, including Chief Executive Officer Li Jian Jun, were questioned about alleged tax fraud worth hundreds of crores, as well as the inability to deduct tax at source (TDS) for numerous financial years. At that time computers and other electronic devices belonging to the company have been confiscated.
Over the years, the telecom behemoth allegedly profited from the trade of telecom equipment while reporting losses on the books.
Separately, just a few months ago, the government reportedly sent notices to Chinese smartphones, asking for details on the data and components used in the devices.
It was reported that the companies in question are Vivo, Oppo, Xiaomi and OnePlus, who together account for more than half of the Indian smartphone market. Center reportedly made the move to determine whether the smartphones sold by these Chinese companies are safe for Indian users.
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