The OEM’s Indian subsidiary will face hearings from April onwards concerning alleged tax evasion.
The Hindu reported on the case in India concerning alleged tax duty evasion, with the Customs Tribunal set to reconvene hearings from 6 April. The case concerns alleged evasion of $403 million (€372 million) in tax owed by HP India, with the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) previously rejecting HP India’s request to refer the case to the Commissioner of Customs “on procedural grounds”.
The case relates back to the Bangalore Commissioner of Customs giving a notice to HP India after an investigation in 2008, which was undertaken by the Directorate of Revenue Intelligence (DRI) into suspected custom duty evasion. In 2010, the DRI issued show-cause notices to the OEM, including seven then-employees and one former member of staff, accusing the company of having “underpaid customs duties while importing products and spare parts” to India.
The original case sought around $370 million (€341 million) in duties plus penalties, and in April 2012 the Bangalore Commissioner of Customs then issued a products-related show-cause notice that confirmed duties and penalties of around $386 million (€356 million) to be paid by the subsidiary and its staff. At the same time, the Commissioner also issued an order that around $17 million (€15 million) should be paid, with HP India contesting the findings before the Customs Tribunal.
The subsidiary also applied for a waiver of the “pre-deposit of [the] remaining demand amount” as a condition for the appeal being heard in court, before it filed applications in December 2013 before the tribunal seeking an early hearing and an extension of the “stay of deposit”. At this point, HP has paid around $69 million (€63 million) to authorities, and in February 2014 was given more time by the tribunal to pay the balance, but the deadline is now about to run out.
That decision read: “On October 27, 2014, Customs Tribunal commenced hearings on cross-appeals of the Commissioner’s orders. The Customs Tribunal rejected HP’s request to remand the matter to the Commissioner on procedural grounds, and is scheduled to reconvene hearings on the merits beginning on April 6, 2015.”