New Delhi: The government has opened a multi-agency probe against Indian operations from the top Chinese telephone company Xiaomi, Oppo and Vivo, amid suspected “deviations and differences” in submitting their law’s financial and other reporting over the past few years, separate from looking inside Their business practices.
Agents will strive to investigate whether there are income hidden, intentional efforts to reduce profits to avoid taxes, and misuse the dominant position in the smartphone market with the detriment of the local industry.
In addition, policies related to alleged non-transparent methods in the source of components and product distribution will also be seen, the source that is familiar with the deliberation to the TOI.
The top source in the government told TII that widening the probe came in the middle of a recent search carried out on Chinese makers by various institutions, including the Department of Income Tax and Directorate of Income Intelligence (DRI).
The Indian Play Fair Fair Competition Commission can also get along with the cost of misuse of dominant positions and limiting trade practices, said a source.
“The initial assessment of financial reporting laws submitted by the company over the past few years has thrown irregularities, mainly referring to the possibility of tax evasion, income hiding, and book manipulation.
There is a big problem, and we see all possible problems,” said an official top.
This problem is also followed by the Electronic Ministry and IT (Meity).
Analysis of submissions with company registrants (ROC) shows that the main Chinese handset players report operational losses even though they have strong sales and have claimed top slots in the league market table.
A detailed questionnaire sent to a subsidiary of India Xiaomi, Oppo and Vivo remained unanswered at the time of pressing.
Oppo and Vivo are owned by the Chinese electronic giant BBK which also controls Oneplus and the brand of Realme sold in India.
Officials said that despite thinking in income and market share in India with a cumulative turnover of more than RS 1 Lakh Crore in 2019-20 (they have not submitted financial records for fiscal 2020-21), Xiaomi, Oppo and Vivo pay any tax in India .
“In fact, Oppo and Vivo have shown negative net worth in India since fiscal 2016-17.” In the case of Xiaomi, which claims to be the leader of the Indian smartphone market, the loss has been heavy, although some of them have been negated through special entries into the profit & loss statement (marked as profits from extraordinary items), titled ‘Prizes are accepted from Hong Kong ‘For business performance.
This is for Rs 2,447 Crore on Fiscal 2018-19, and Rs 3,277 Crore in Fiscal 2019-20.
In recent years, when the shake of Chinese companies grew in India, holding homegrown companies such as Lava, Carbonn, Micromax and Intex fell quickly.
The share of Indian companies in the smartphone market in a single low digit, against the dominant position they occupy up to several years ago.
Another bone dispute is the reluctance of Chinese companies – especially Oppo and Vivo – to align with local players for distribution.
The company prefers to have Chinese partners as a distributor of Tier 1 and have not opened a chain.
“The same thing is the case when it comes to sources of spare parts and components, where there is a lack of transparency.
Tier 1 supplier, and even Tier 2, mostly China and this ensures that they control strict technology and price aspects,” said an official.
Some agents to investigate Chinese telephone companies
