During an investigation pertaining to M/s Oppo Mobiles India Private Limited, a subsidiary company of China’s “Guangdong Oppo Mobile Telecommunications Corporation Ltd”, the Directorate of Revenue Intelligence (DRI) has detected customs duty evasion of around Rs 4,389 crores.
Oppo India is engaged in the business of manufacturing, assembling, wholesale trading, and distributing mobile handsets and accessories thereof, across India. Oppo India deals in various brands of mobile phones, including Oppo, OnePlus, and Realme.
During the course of the investigation, searches were conducted by DRI at the office premises of Oppo India and residences of its key management employees, which led to the recovery of incriminating evidence indicating wilful misdeclaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones.
This misdeclaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to Rs 2,981 crores. Among others, senior management employees and domestic suppliers of Oppo India were questioned, who in their voluntary statements accepted the submission of wrongful description before the Customs Authorities at the time of import.
The investigation also revealed that Oppo India had remitted/made provisions for payment of ‘Royalty’ and ‘Licence Fee’ to various multinational companies, including those based in China, in lieu of the use of proprietary technology/brand/IPR license, etc.
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 rules. The alleged duty evasion by M/s Oppo India on this account is Rs. 1,408 crores.
A sum of Rs 450 crores has been voluntarily deposited by Oppo India, as partial differential Customs duty short paid by them.
After completion of the investigation, a show-cause notice has been issued to Oppo India demanding customs duty amounting to Rs. 4,389 crores. The said notice also proposes relevant penalties on Oppo India, its employees, and Oppo China, under the provisions of the Customs Act, 1962.