New Delhi, December 31, : , The Income Tax Department conducted searches in India on Friday against foreign-controlled cell phone manufacturing companies suspected of tax evasion.Our team raided certain foreign-controlled mobile communications and hand-set manufacturers companies along with their associate persons.
An IT-D official said that raids took place in Karnataka and Tamil Nadu as well as Assam, West Bengal.
Two major companies were found to have sent remittances in the form of royalty to their group companies located overseas.This amounts to over Rs 5.500 crore.
These companies failed to comply with the Income Tax Act’s regulatory requirements for disclosing transactions with related enterprises.
An official stated that such a lapse could make them subject to penal action under Income Tax Act.The amount of this penalty could reach more than Rs 1000 crore.
The Indian company has foreign funds in its books, but the sources from which these funds were received seem to be questionable.
It is believed that they are not creditworthy and have no financial history.According to the official, such loans amount to Rs.5,000 crore.
According to an official, evidence has been collected regarding the inflation of expenses and payments made on behalf of associated companies, which resulted in a reduction of taxable profit for the Indian handset manufacturer company.
The amount may be more than Rs 1400 crore.
The services were provided by an Indian entity.However, one of these companies did not follow the tax deduction provisions.This account may be subject to TDS liability up to Rs 300 crore.
A raid on Friday of an Indian company revealed that it had not been in control and was under the management of a neighboring country.The company transferred out Rs 42 crore to India, without paying any taxes.
Raids on fintech companies and software service companies showed that many of these companies were created to inflate expenses and siphon off funds.
An official stated that these companies paid for non-related business purposes and used bills issued by an Tamil Nadu-based, non-existent company concern.
The spokesperson for Xiaomi said that the smartphone maker had reacted to I-T raids and stated: “As responsible companies, we attach great importance to complying with Indian laws.” We are fully cooperating in India with the authorities as an investor partner.
atk/pgh
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