Author 丨 Poplar
Editor 丨 Zhang Weixian
Figure Source 丨 Figure worm
On May 1, it was reported that the Indian government had detained Xiaomi Technology India Pte Ltd for allegedly illegally sending money to foreign entities in violation of the relevant provisions of the local Foreign Exchange Control Law. $725 million (about 4.8 billion yuan) in assets.
In this regard, Xiaomi India issued a statement saying that as a brand dedicated to India, all the company's operational activities strictly comply with local laws and regulations.
Xiaomi India said, "We have carefully studied the orders of the authorities and we believe that the royalties and bills we pay to the banks are legal and real. These royalties paid by Xiaomi India are used for licensed technology and intellectual property rights used in our Indian version of our products. For Xiaomi India, paying such royalties is a legitimate business practice. Of course, we will work closely with the government to clarify any misunderstandings."
In fact, this is the second time that the Indian government has investigated Xiaomi India this year, and compared with the last 580 million yuan in taxes, the seizure of the company's assets will have a greater impact on Xiaomi India.
In early January, India's Ministry of Finance issued a statement saying that India's Tax Intelligence Agency (DRI) had issued a notice to Xiaomi Technologies India to recover about Rs 653 crore (about 558 million yuan) in taxes from the company.
According to the Ministry of Finance documents, the evidence collected by the Indian Revenue Intelligence Agency during the investigation shows that neither Xiaomi India nor its contract manufacturers included the "royalty amount" paid by Xiaomi India in the appraised value of its imported goods, in violation of india's Customs Act and customs valuation rules.
At that time, Xiaomi Group responded that Xiaomi insisted on legal and compliant operations around the world and complied with the relevant laws and regulations of the place of operation. The root cause of this tax problem 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.
Xiaomi also said that what the Indian authorities required Xiaomi to pay was the import link tax related to the royalties between April 1, 2017 and June 30, 2020, which had nothing to do with Xiaomi's recent business, and the official statement was not the final result. On this issue, Xiaomi will also continue to communicate with the relevant departments in India.
According to the 2022 Q1 Indian market smartphone report released by Canalys a few days ago, Xiaomi's market share in the Indian market in the first quarter was 21%, ranking first.
This issue is edited by Peipei Jiang, Intern Kailin Li
