As a result of Xiaomi's alleged tax evasion in India

The Ministry of Finance imposed a fine of Rs 653 crores on the company. It was reported recently that both Oppo and Xiaomi could face fines of up to Rs 1,000 crores in India. The details follow.

Xiaomi India Allegedly Dodged Customs Duty in India

According to the report, Xiaomi India has evaded customs duty by undervaluing its products. A DRI investigation was conducted in response to this against Xiaomi and its contractors.

As a result of the search of Xiaomi India's premises, "incriminating" documents were found that suggested the Chinese company was remitting royalty and license fees to Qualcomm USA and Beijing Xiaomi Mobile Software.

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The royalty and license fees weren't added to the transaction value of the goods imported by Xiaomi and its contractors. Customs valuation (determination of the value of imported goods) Rules 2007 found this an offense under Section 14 of the Customs Act, 1962.

Under the provisions of the Customs Act, 1962, three show-cause notices have been served on M/s Xiaomi Technology India Private Limited for the recovery and collection of the fine.

Xiaomi India said in an official statement, "We ensure compliance with all Indian laws at Xiaomi India.". The notice is under review. We will provide all necessary documentation to the authorities as a responsible company.

As a result, it was revealed that Xiaomi phones sold in India are either imported or contain imported parts that are assembled in India after being imported. As a result, it is usually contracted to import from a certain number of suppliers.