Tax authorities in India commenced a tax evasion investigation into Huawei, with searches of the Chinese vendor’s facilities carried out in multiple locations, adding to the company’s woes in a country once seen as a major market for its 5G kit.
Huawei issued a statement confirming tax officials visited its local offices and met with personnel, noting it is confident “our operations in India are firmly compliant to all laws and regulations”.
It added the company will approach the related government departments for more information and “fully cooperate as per the rules and regulations”.
The Income Tax Department is investigating Huawei for unreported transfers of royalty payments out of India, The Economic Times (ET) reported, noting the raids in New Delhi, Gurgaon and Bangalore were part of a wider move against telecoms companies which allegedly avoided dues by not reporting the transfer of profits overseas.
ET wrote the tax department found in most case funds were routed “through layering to the parent company under the guise of bogus expenses, royalty, share purchases and other expenses”.
In August 2021, the department searched ZTE’s local offices and questioned the unit’s CEO after finding a variety of irregularities, including tax evasion.
Huawei and China face de facto bans on deploying 5G equipment in India after the government issued a notice requiring operators to ensure kit was procured from trusted sources in March 2021.