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Govt says Chinese phone-makers, Vivo, Oppo, Xiaomi evaded Rs 9,000 crore in taxes

Trouble for Chinese phone manufacturers?

Chinese smartphone makers, including Oppo Mobile, Vivo India and Xiaomi, have been found evading taxes to the tune of Rs 9,000 crore in India, the government has said in Parliament.

The data shared by Minister of State for Electronics and IT Rajeev Chandrasekhar in Rajya Sabha pointed out tax evasion of around Rs 9,000 crore, comprising customs duty and GST — detected between 2018-19 and 2022-23.

The Minister has said that major Chinese mobile handset brands which are operating in India are Oppo, Vivo, Xiaomi, Transsion (which operates three brands in India, viz. Itel, Tecno and Infinix), Realme and Oneplus.

“These companies manufacture the mobile handset either by themselves or through contract manufacturers. Their cumulative turnover in 2021-22 was estimated to be Rs 1.5 lakh crore in India. The total direct employment generated by them in their manufacturing operations is more than 75,000. They also have sales and operational workforce of around 80,000 workers,” he said.

He also said that primarily, these Chinese companies have setup their own manufacturing units.

“However, they work with contract manufacturers like Bharat FIH Limited and DBG Technology (India) Private Limited also which have also set up Electronics Manufacturing Services (EMS) operations in India. The distribution of mobile handsets is mainly handled by Indian companies.

“However, some of the Chinese companies like Oppo and Vivo have some Chinese distributors also,” Chandrasekhar said.

“The company-wise list of Chinese mobile handset companies reported in evasion of Customs Duty along with the amount of tax evasion detected and recovered during the period 2017-18 to July 1, 2023 are Oppo Mobile India Pvt Ltd, which has been found evading Rs 5,086 crore in taxes which includes Rs 4,403 crore in customs duty and Rs 683 crore in the form of GST.

“Vivo has evaded taxes worth Rs 2,923.25 crore comprising Rs 2,875 crore in Customs duty and Rs 48.25 crore in GST,” according to the written reply by the Minister.

“Tax evasion of Rs 851.14 crore has been detected in the case of Xiaomi Technology India Pvt Ltd comprising Rs 682.51 crore in customs duty and Rs 168.63 crore in GST,” he stated in the reply.

Chandrasekhar also shared that Customs duty evasion of Rs 4,389 crore was detected in 2019-20 in the case of Oppo Mobile India Pvt Ltd, out of which Rs 450 crore has been recovered. He said that Vivo India Mobile Pvt Ltd was found to be evading customs duty of Rs 2,217 crore out of which Rs 72 crore has been recovered in 2020-21.

In 2019-20, Xiaomi Technology India Pvt Ltd was found to be evading Customs duty of Rs 653.02 crore out of which Rs 46 lakh has been recovered.

In 2022-23, Vivo Mobile India Pvt Ltd was found evading Rs 658 crore.

According to the official data, another Chinese manufacturer, Lenovo, has evaded Rs 42.36 crore of GST.

He said that the government has been able to recover Rs 1,214.83 crore from Oppo, Rs 168.25 crore from Vivo and Rs 92.8 crore from Xiaomi.

The minister was replying to a question on the number of Chinese handset companies which have evaded taxes and made illegal remittances in India.