On the evening of December 21st last year, law enforcement officers from the Tax Bureau of the Ministry of Finance of India rushed to more than 2 places in India to check taxes, and a series of Chinese-funded enterprises such as Xiaomi, OPPO and Yijia were "recruited" in this raid. Since then, the outside world has been waiting for how the Indian government will issue a ticket.
despite the unfavorable environment, China mobile phones are still very popular in the Indian market. According to recent market survey data, at least two out of every three smartphones in India are China brands.
Xiaomi was fined
According to the Indian Ministry of Finance, the Indian Tax Intelligence Bureau found in the investigation that Xiaomi India Company did not include the patent license fees and royalties paid to Qualcomm and Beijing Xiaomi Mobile Software Company in the declaration of import value, which depressed the value of goods and violated the Customs Law of India.
Xiaomi does not fully agree with the Indian Ministry of Finance. Xiaomi said that the root cause of this tax issue is that all parties have differences on the price determination of imported goods. Whether royalties including patent licensing fees should be included in the price of imported goods is a complex technical problem in all countries.
on December 21st, the offices of Chinese-funded enterprises such as Xiaomi near Sriperumbudur, the fourth largest city in India, were first searched. The raid lasted for one day and one night, and it was not until the night of the 22nd that the Tax Bureau of the Ministry of Finance revealed this action to the public.
On December 23rd, a spokesman for the Indian Embassy in India said: "The development of Sino-Indian economic and trade cooperation is hard-won, which conforms to the common interests of the two peoples. China hopes that China will provide an open, fair and non-discriminatory business environment for market players including Indian enterprises. "
according to the market research data released by Counterpoint Research in the third quarter of 221, the share of China brand in Indian smartphone market is as high as 74%. Among the top five market share, except for the second place won by Samsung, the rest are from Chinese brands, namely Xiaomi, vivo, Realme and OPPO.
similar experiences of Chinese enterprises
historically, the Indian government has repeatedly "checked taxes" on foreign-funded enterprises. Professor Zhang Jiadong, director of the Center for South Asian Studies at Fudan University, pointed out that considering India's complex tax and legal system and India's administrative tradition, it is a bit difficult for the Indian tax authorities to make a high-profile move this time, so as not to find out the problem at all.
The person in charge said that due to the investigation of downstream Chinese-funded enterprises, they were subject to tax investigation in November and received a written notice in December, requesting to submit the import and export details from January 1, 22, as well as the product supply. The Indian Tax Intelligence Bureau in the region believes that the enterprise has made an error in adapting the tax rate when importing goods, and is suspected of tax evasion.