India asks Xiaomi to pay almost $88 million in import taxes

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India asks Xiaomi to pay nearly $88 million in import taxes

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An guest holds a XiaomiCorp Mi A1 double video camera gadget throughout the smart device’s launch in New Delhi, India, on Tuesday,Sept 5, 2017.

Anindito Mukherjee|Bloomberg|Getty Images

India has actually required the regional arm of Chinese smart device maker Xiaomi to pay 6.53 billion rupees ($878 million) in import taxes, following an examination.

The Directorate of Revenue Intelligence performed a probe which caused the healing of files throughout searches of Xiaomi India properties, a Finance Ministry declaration stated Wednesday.

“During the investigations, it further emerged that the ‘royalty and licence fee’ paid by Xiaomi India to Qualcomm USA and to Beijing Xiaomi Mobile Software Co. Ltd., China (related party of Xiaomi India) were not being added in the transaction value of the goods imported by Xiaomi India and its contract manufacturers,” it stated.

“By not adding ‘royalty and licence fee’ into the transaction value, Xiaomi India was evading customs duty being the beneficial owner of such imported mobile phones, the parts and components thereof,” the declaration included.

After finishing the examination, the DRI released 3 “show cause” notifications to Xiaomi associated to the healing of 6.53 billion rupees for the duration in between April 2017 and June2020 These notifications are a kind of court order that needs several of the celebrations to a case to validate, describe or show something to the court.

Xiaomi did not react to CNBC’s ask for remark.

This is not the very first time India has actually done something about it versus Chinese innovation business.

Last year, the South Asian country prohibited 118 apps with links to China, pointing out nationwide security threats. It came at the height of geopolitical stress in between both nations.