Unique: ByteDance says India’s freeze on financial institution accounts is harassment

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© Reuters. FILE PHOTO: FILE PHOTO: ByteDance brand is seen on this illustration

By Abhirup Roy and Aditya Kalra

MUMBAI (Reuters) – China’s ByteDance has advised an Indian court docket {that a} authorities freeze on its financial institution accounts in a probe of doable tax evasion quantities to harassment and was finished illegally, in accordance with a submitting seen by Reuters.

ByteDance in January decreased its Indian workforce after New Delhi maintained a ban on its in style video app TikTok, imposed final yr after a border conflict between India and China. Beijing has repeatedly criticised India over that ban and people of different Chinese language apps.

An Indian tax intelligence unit in mid-March ordered HSBC and Citibank in Mumbai to freeze financial institution accounts of ByteDance India because it probed a few of the unit’s monetary dealings. ByteDance has challenged the freeze on the 4 accounts in a Mumbai court docket.

None of ByteDance India’s workers have been paid their March salaries because of the account freeze, mentioned two individuals acquainted with the matter. The corporate advised the court docket it has a workforce of 1,335, together with outsourced personnel.

Within the 209-page court docket submitting lodged on March 25, ByteDance advised the Excessive Courtroom in Mumbai the authorities acted towards the corporate with none materials proof and gave no prior discover, as required by Indian legislation, earlier than such “drastic motion”.

Blocking accounts “through the technique of investigation quantities (to) making use of undue coercion,” ByteDance argued. It’s “meant, improperly, to harass the petitioner.”

India’s Directorate Normal of Items & Providers Tax Intelligence, and the finance ministry which oversees it, didn’t instantly reply to requests for remark over the weekend.

The main points of the tax investigation haven’t beforehand been reported. The tax company advised ByteDance final yr it had causes to imagine the corporate suppressed sure transactions and claimed extreme tax credit, the submitting reveals.

ByteDance declined to touch upon its court docket submitting however advised Reuters on Tuesday it disagrees with the choice of the tax authority. HSBC declined to remark, whereas Citibank didn’t reply.

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The court docket declined to grant ByteDance quick aid in a quick listening to on Wednesday. The following listening to is scheduled for Tuesday.

The investigation centres on potential evasion of taxes associated to internet advertising and different monetary dealings between ByteDance India and its mother or father entity in Singapore, TikTok Pte Ltd. TikTok didn’t reply to an e mail looking for remark.

ByteDance advised the court docket its India workforce consists of 800 individuals working in its “belief and security” staff that helps actions like content material moderation abroad.

The corporate has “strong enterprise plans in India and isn’t considering winding up,” it mentioned, urging the court docket to raise the freeze on the accounts.

The tax company began investigating the corporate in July. It inspected paperwork on the firm’s workplace and summoned and questioned at the very least three executives, the submitting says. Authorities additionally requested ByteDance to submit paperwork, together with invoices and agreements signed with some purchasers.

ByteDance representatives “appeared a number of instances” earlier than tax officers and supplied paperwork, the submitting says.

TikTok, certainly one of India’s hottest video apps earlier than it was banned, has confronted scrutiny around the globe.

Underneath then-President Donald Trump, the USA alleged the app posed nationwide safety issues. The brand new administration of Joe Biden has paused a authorities lawsuit that would have resulted in a de facto ban on TikTok’s use there.





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