The Directorate of Revenue Intelligence (DRI) has detected customs duty evasion of around ₹2,217 crore during an investigation against Chinese mobile manufacturer Vivo Mobile India Pvt. Ltd.

During the course of investigation, searches were conducted by DRI officers at the factory premises of Vivo India, which led to the recovery of incriminating evidence indicating wilful mis-declaration in the description of certain items imported by Vivo India, for use in the manufacture of mobile phones, the Ministry of Finance says in a statement.

"This mis-declaration resulted in wrongful availment of ineligible duty exemption benefits by M/s Vivo India, amounting to ₹2,217 crore. After completion of the investigation, a Show Cause Notice has been issued to M/s Vivo India demanding Customs duty amounting to ₹2,217 crore, under the provisions of the Customs Act, 1962," the DRI says.

A sum of ₹60 crore has been voluntarily deposited by Vivo India, towards discharge of their differential duty liability, it adds.

This comes weeks after the Enforcement Director said that Vivo India remitted about ₹62,476 crore - almost 50% of its turnover of ₹1,25,185 crore - out of India, mainly to China.

The probe agency seized ₹465 crore including fixed deposits (FDs) to the tune of ₹66 crore of Vivo India, 2kg gold bars, and cash amount aggregating to around ₹73 lakh under the provisions of PMLA, 2002.

These remittances were made to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India, the Enforcement Directorate had said.

ED carried out searches at 48 locations across the country belonging to Vivo India and its 23 associated companies such as Grand Prospect International Communication Pvt Ltd (GPICPL).

Vivo Mobiles India was incorporated in August 2014 as a subsidiary of Multi Accord Ltd, a Hong Kong based company and was registered at ROC Delhi. Grand Prospect International Communication Pvt Ltd (GPICPL) was registered on December 3, 2014 at ROC Shimla, with registered addresses of Solan, Himachal Pradesh and Gandhi Nagar, Jammu.

As per the probe agency, GPICPL and its shareholders had used forged identification documents and falsified addresses at the time of incorporation. The allegations were found to be true as the investigation revealed that the addresses mentioned by the directors of GPICPL did not belong to them, but in fact it was a government building and house of a senior bureaucrat, ED had said.

Vivo India, a subsidiary company of China-based Vivo Communication Technology Co. Ltd., is engaged in the business of manufacturing, assembling, wholesale trading as well as distribution of mobile handsets and accessories.

Recently, in another set of investigations conducted by the Directorate of Revenue Intelligence, show cause notices demanding duty of ₹4,403.88 crore were issued to Oppo Mobiles India.

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