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

China’s ByteDance has informed an Indian courtroom {that a} authorities freeze on its financial institution accounts in a probe of potential tax evasion quantities to harassment and was performed illegally, in accordance with a submitting seen by Reuters.

ByteDance in January decreased its Indian workforce after New Delhi maintained a ban on its standard 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 courtroom.

None of ByteDance India’s staff have been paid their March salaries as a result of account freeze, mentioned two folks conversant in the matter. The corporate informed the courtroom it has a workforce of 1,335, together with outsourced personnel.

Within the 209-page courtroom submitting lodged on March 25, ByteDance informed 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”.

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

India’s Directorate Common of Items & Companies 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 informed ByteDance final yr it had causes to consider the corporate suppressed sure transactions and claimed extreme tax credit, the submitting exhibits.

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

Promoting, different offers scrutinised

The courtroom declined to grant ByteDance instant 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 marketing and different monetary dealings between ByteDance India and its dad or mum entity in Singapore, TikTok Pte Ltd. TikTok didn’t reply to an e-mail in search of remark.

ByteDance informed the courtroom its India workforce contains 800 folks working in its “belief and security” staff that helps actions like content material moderation abroad.

The corporate has “sturdy enterprise plans in India and isn’t considering winding up,” it mentioned, urging the courtroom to elevate 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 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 occasions” earlier than tax officers and offered paperwork, the submitting says.

TikTok, one among India’s hottest video apps earlier than it was banned, has confronted scrutiny world wide.

Beneath then-President Donald Trump, america 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.

Reporting by Abhirup Roy and Aditya Kalra.

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