Xiaomi mobile phone was caught by India to be difficult Really tax evasion?

Operator Finance Kang Zhao/Wen

On January 6, the News, Xiaomi mobile phones in India suffered severe criticism, the Indian Ministry of Finance issued an official statement saying that the Indian Tax Intelligence Agency has issued a notice to Xiaomi Technology India Limited to recover 653 million rupees (about 560 million yuan) of tax to the company. So, what does this mean?

Let's take a look at the official Indian statement. According to an intelligence report, Xiaomi India evaded tariffs by undervaluing it, and the Indian Tax Intelligence Agency launched an investigation into the company and its contract manufacturers, according to the Ministry of Finance. The statement showed that the Tax Intelligence Agency of India conducted a search of Xiaomi India's business premises and recovered documents indicating that Xiaomi India paid royalties and licensing fees to Qualcomm and Beijing Xiaomi Software Co., Ltd.

Looking at Xiaomi's statement, its response said that Xiaomi Technology insists on legal operations worldwide. Xiaomi said that the root cause of the tax problem this time is that there are differences between the parties on the price determination of imported goods. Whether royalties, including patent royalties, should be included in the price of imported goods is a complex technical dilemma in all countries.

Combined with the experience of Chinese enterprises in India in the past two years, it can be seen that this is undoubtedly one of the cases of India's new round of attacks on Chinese enterprises. Previously, India banned hundreds of Chinese Internet applications on the grounds of national security, and the Chinese applications that were banned by India have been removed from the Apple India App Store and the Google Play Store in India. And now it's the turn of Chinese mobile phone companies.

On December 21 and 22, 2021, the Revenue Department of the Ministry of Finance of India allegedly conducted a surprise inspection of the offices and manufacturing plants of mobile phone manufacturers xiaomi, OPPO, one plus, Foxconn and other mobile phone manufacturers from greater China, and Xiaomi Technology was the first Chinese company to be accused of "tax evasion".

(Editor-in-Charge: Han Li)