Vivo India transferred 50% of its turnover money to China to avoid taxes

To avoid paying taxes in India, Chinese mobile manufacturer firm Vivo India remitted about Rs 62,476 crore of its turnover, mainly to China.

The Enforcement Directorate (ED) has seized funds worth Rs 465 crore from 119 bank accounts by various entities, Rs 73 lakh cash and 2 kg gold bars after it conducted raids early this week against Vivo Mobile India and its 23 associated firms across the country.

The agency alleged that employees of Vivo India, including some Chinese nationals, did not cooperate with the search proceedings and tried to escape, remove and hide digital devices which were retrieved by the search teams.

As many as 22 companies set up by ex-director of Vivo Bin Lou and another Chinese national named Zhixin Wei have come under the radar of the federal agency. While Bin Lou set up 18 companies in 2014-15 after the incorporation of Vivo India in August 2014, Wei set up four companies.

The agency stated, “These companies are found to have transferred huge amount of funds to Vivo India. Further, out of the total sale proceeds of INR 1,25,185 Cr, Vivo India remitted INR 62,476 Cr i.e, almost 50% of the turnover out of India, mainly to China. These remittances were made in order to disclose huge losses in Indian incorporated companies to avoid payment of taxes in India.”

Lou was also Director of Grand Prospect International Communication (GPICPL), a Jammu and Kashmir distributor of Vivo which allegedly falsely projected itself as a subsidiary of Vivo. The company is being investigated by the Economic Offences Wing of Delhi Police and the ED on charges of conducting fraudulent activities. All three Chinese nationals of GPICPL including Lou have already left India.