Indian tax authorities on Wednesday have asked Xiaomi India to pay Rs. 653 crore for alleged evasion of import duty. The investigation was carried out by the Directorate of Revenue Intelligence (DRI).
A notice has been sent to Xiaomi after recovering incriminating documents indicating that Xiaomi India was remitting royalty and licence fees to Qualcomm USA and Beijing Xiaomi Mobile Software Co. Ltd., under contractual obligation, the government said in a statement.
Meaning, the “royalty and licence fee” paid by Xiaomi India to Qualcomm USA and to Beijing Xiaomi Mobile Software Co. Ltd., China were not being added to the transaction value of the goods imported by Xiaomi India and its contract manufacturers.
Three show-cause notices have been issued to Xiaomi for the tax demand and recovery of Rs. 653 crores for the period April 2017 to June 2020, it added.
“At Xiaomi India, we give utmost importance to ensuring we comply with all Indian laws. We are currently reviewing the notice in detail. As a responsible company, we will support the authorities with all necessary documentation,” a spokesperson for the company said.