Mobile phone makers Xiaomi and Oppo can be fined Rs 1,000 crore for violating the law, the Income Tax department said today after searches across India last week.
The searches were carried out on December 21 in Delhi and 11 states – Karnataka, Tamil Nadu, Assam, West Bengal, Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Bihar, Rajasthan.
“The search action has revealed that two major companies have made remittance in the nature of royalty, to and on behalf of its group companies located abroad, which aggregates to more than Rs.5500 crore,” the tax department said in a statement today.
“These companies had not complied with the regulatory mandate prescribed under the Income-tax Act, 1961 for disclosure of transactions with associated enterprises. Such lapse makes them liable for penal action under the Income-tax Act, 1961, the quantum of which could be in the range of more than Rs.1000 crore,” the statement added.