An attendee holds Xiaomi’s Mi A1 dual camera device during the smartphone launch event in New Delhi, India, on Tuesday, September 5, 2017.
Anindito Mukherjee | Bloomberg | beautiful pictures
India has requested the local branch of the Chinese smartphone maker Xiaomi must pay 6.53 billion rupees ($87.8 million) in import duties, after an investigation.
The Revenue Administration conducted an investigation that resulted in the recovery of documents during a search of Xiaomi India premises, a statement from the Ministry of Finance said on Wednesday.
“During the investigation, it emerged that the ‘royalty and licensing fees’ paid by Xiaomi India to Qualcomm USA and for Beijing Xiaomi Mobile Software Co., Ltd, China (a related party of Xiaomi India) was not included in the transaction value of goods imported by Xiaomi India and its contract manufacturers password,” it said.
“By not adding ‘royalty and license fees’ to the transaction value, Xiaomi India is evading customs duties by becoming the beneficial owner of such imported mobile phones, parts and their components,” the statement added.
After completing the investigation, DRI issued three “show cause” notices to Xiaomi regarding the recall of Rs 6.53 billion between April 2017 and June 2020. This notice is a type of court order that requires one or more parties to participate. into a case to justify, explain, or prove something in court.
Xiaomi did not respond to CNBC’s request for comment.
This is not the first time India has taken action against Chinese tech companies.
Last year, the South Asian country banned 118 apps has links to China, citing national security risks. It comes at the height of geopolitical tensions between both countries.
