The logo of Huawei is seen at the Mobile World Congress in Barcelona, Spain
Image Courtesy: Sergio Perez

Income tax authorities search premises of Huawei offices in Delhi, Bangalore

The Income-tax Department has carried out searches on Wednesday at different premises of Chinese telecom company Huawei in the country, as part of a tax evasion probe, according to official sources. The raids commenced at the company’s headquarters in Delhi, Bengaluru (Karnataka), and Gurugram (Haryana)on Tuesday.

The logo of Huawei is seen at the Mobile World Congress in Barcelona, Spain
Image Courtesy: Sergio Perez

IT officials reviewed account books, financial documents, and company records as part of a tax evasion probe into the company, its Indian businesses, and offshore transactions, according to sources. They also said that some records had been seized. The company claimed that its operations in the country were “firmly compliant.”

Huawei said in a statement, “We have been informed of the visit of the Income Tax team to our office and also of their meeting with some personnel. Huawei is confident our operations in India are firmly compliant with all laws and regulations. We will approach related Government departments for more information and fully cooperate as per the rules and regulations and follow the right procedure.”

This follows similar searches on the facilities of ZTE, a Chinese technology company, a few months ago. Huawei is the second Chinese telecom company to be subjected to IT raids. The government stated that it discovered a number of irregularities, including several tax evasions, bogus expenses worth crores of rupees, and illegal share purchases.

In the telecom equipment industry, two Chinese multinational companies (Huawei and ZTE) have been offering infrastructure support to major telecom service providers (TSPs), such as Bharti Airtel and Vodafone Idea, and are still involved in ongoing contracts for 4G telecom services under their existing contracts.

However, both Chinese companies have been turned down trials for the forthcoming 5G network over the last two years, citing national security concerns. Companies must receive government clearance to renew current (existing contract) agreements, according to the National Security Directive on the telecommunications sector.

Aside from telecom equipment providers, the IT department recently searched multiple offices and linked individuals Chinese smartphone manufacturers Xiaomi and Oppo. The IT department claimed to have found alleged unaccounted income amounting to over Rs. 6,500 crore as a result of violations of Indian tax laws and regulations.

On Monday, the government also released a fresh ban list of 54 Chinese apps including Tencent Xriver, Viva Video Editor, Nice Video Baidu, and gaming app Garena Free Fire Illuminate, claiming that they are either cloned versions or have identical functionality, as well as privacy and security concerns, as alleged in the previously banned 267 apps in 2020.