Xiaomi India fined over Rs 653 crore, know the reason
China's popular smartphone maker Xiaomi has lost Rs 653 crore. The Union Finance Ministry on Wednesday issued a notice of Rs 653 crore to the India unit of Chinese phone maker Xiaomi for alleged violation of the Customs Act, saying the company did not include royalty and license fee in the value of its imports. Is. Thus now the company will have to pay a fine of Rs 653 crore.
The Union Finance Ministry said on Wednesday that Xiaomi India has also been issued a show-cause notice following the recovery of documents during a search of its branches, indicating remittance of royalty and license fees to US and Chinese firms under contractual obligations.
Giving information, a Xiaomi spokesperson told a news agency, "At Xiaomi India, we attach utmost importance to ensuring that we comply with all Indian laws. At the moment we are reviewing the notice in detail. A responsible As a company, we will support the authorities with all necessary documents."
Evidence collected during the investigation by the Directorate of Revenue Intelligence (DRI) revealed that neither Xiaomi India nor its contract manufacturer and its contract manufacturers included royalty paid by the firm in the assessable value of the goods imported. Which is in violation of Customs Act, the Finance Ministry has said.
The finance ministry said that by being the beneficial owner of such imported mobile phones, Xiaomi India was evading customs duty by not adding royalty and license fee to the transaction value.
"After completion of investigation by DRI, M/s Xiaomi Technology India Pvt Ltd, 2020, under the provisions of the Customs Act, 1962 for the period from 1st April, 2017 to 30th June, for the period of 1st April, 2017 to 30th June, for demand and recovery of Rs. Show cause notices have been issued" the Finance Ministry has said.
Although earlier the news was that both Xiaomi and Oppo companies can be fined Rs 1000 crores but now Xiaomi has been fined Rs 653 crores for violating the rules.