Chinese carmaker BYD faces tax probe by DRI: Report

Chinese automaker BYD, which recently shelved its plan to jointly build electric cars in India with its partner Megha Engineering, is facing an ongoing investigation by Directorate of Revenue Intelligence (DRI) for paying too little tax on imported parts for cars it assembles and sells here, Reuters reported on Wednesday. 

Directorate of Revenue Intelligence (DRI) has alleged that BYD, which is China's largest electric vehicle (EV) maker, said that the company hasn’t paid tax worth Rs 730 million ($9 million).  

The report said that though BYD has deposited the remaining amount after the DRI's preliminary findings, another probe has been launched to check additional tax charges and penalties. The DRI is yet to issue a final notice to BYD, which can challenge the findings. 

Last month, the Centre reportedly had rejected BYD Motors' proposal to set up a $1 billion four-wheeler manufacturing facility in India in partnership with Hyderabad-based Megha Engineering and Infrastructures Ltd. 

The two companies had submitted a proposal to Department for Promotion of Industry and Internal Trade (DPIIT) to set up an electric vehicle plant in Hyderabad. 

Both companies intended to set a 10,000-15,000 unit four-wheeler-making factory in Hyderabad, where Megha was putting up the capital while technology and know-how was to come from BYD. The investment was expected to be somewhere close to $1 billion.  

BYD already has a presence in India, where it sells the Atto 3 electric SUV and the e6 electric sedan to corporate fleets.    

Besides, Olectra Greentech, a unit of Megha Engineering and Infrastructures, has already developed two electric buses with technical support from BYD. 

In April 2020, India tweaked its foreign direct investment policy, companies in neighbouring countries had to take approval from the Indian government to invest in Indian firms. A panel headed by the Union home secretary has to clear such proposals first.   

Though the Centre never mentioned any country, it was intended to prevent Chinese companies from acquiring entities in India following the Covid-19 pandemic.

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