Huawei and Vivo, both Chinese companies, are closely monitored by the Indian government. Both companies have been accused of failing to pay the tax by using illegal tactics. Vivo India has been accused of transferring Rs 62,746 crore to China. Out of the company’s total sales proceeds of Rs 1,25,185 crore, Vivo India has been accused of returning half of it to mainly China. The Enforcement Directorate (ED) said this move was made by Vivo India to be able to disclose huge losses in Indian companies to avoid paying taxes within India.
According to ET Telecom, ED has seized more than 119 bank accounts of various entities amounting to Rs 465 crore. The seizure by ED was made on the basis of the relevant provisions of the Money Laundering Prevention Act.
What is Huawei doing in India?
Huawei India has been under the strict supervision of the tax authorities. The company is accused of sending large amounts of money to its parent company in China in the form of dividends. This helped the company in lowering taxes in India.
Even as the company’s revenues fell, it repatriated Rs 750 crore, the IT department said. Huawei’s bank accounts were frozen by the department in February. There was a very large search of Huawei’s property as the company was accused of tax evasion.
Huawei has claimed in its petition that it has done nothing wrong, and when its accounts were added by the IT department without any notice, its business was affected. The tax authorities said Huawei’s petition is just a “trick” to disrupt departmental procedures and avoid paying taxes.
To date, Huawei has not submitted its accounts to the income tax department, making it impossible for the department to ascertain the truth about the amount it declared as income.
This sort of thing would hurt consumer sentiment towards Chinese companies in general. Especially if a name like Vivo being accused of tax evasion while earning from India would be a huge disappointment to the company’s fans.
