Row between China’s ByteDance, Indian tax authorities reaches court

By LE Desk

New Delhi, March 30: A dispute between Chinese internet technology company ByteDance and the Indian Goods and Services Tax (GST) authorities has reached the court with the Shanghai-headquartered firm seeking to quash New Delhi’s tax recovery efforts.

The Bombay High Court has listed the dispute between Bytedance (India) Technology Pvt Ltd. and the Indian government for hearing on Wednesday.

A government official confirmed that the dispute was over Goods and Services Tax (GST) related matters. The Indian government has been on a drive to enforce GST compliance in the last few months in which cases were booked against several thousands of entities. The tax enforcement drive has also resulted in an improvement in GST receipts since the country opened up after the national lockdown.

News agency Reuters reported citing two sources that the Indian authorities have blocked at least two of ByteDance’s bank accounts for alleged tax evasion, prompting it to ask the court to quash the directive.

The company has rejected the tax claims but said it was working with the tax authorities. “At ByteDance, we are committed to abiding by local laws and regulations. While we disagree with the decision of the tax authority in this matter, we will extend our full cooperation to the government” said a spokesperson for Bytedance, the Mint reported.

Emails sent to the finance ministry seeking comments remained unanswered till press time.

ByteDance in January slashed its Indian staff strength after the government decided to retain a ban on its popular video app TikTok, first prohibited last year following a border clash between India and China. China has repeatedly criticised India’s move and said it suspected it was against WTO rules, the Reuters report said.

According to the Reuters report, in mid-March, the authorities ordered two of ByteDance India’s bank accounts in Citibank and HSBC to be blocked because of alleged evasion of certain taxes in online advertising dealings between the ByteDance unit in India and its parent entity in Singapore, TikTok Pte Ltd.

The authorities also directed Citibank and HSBC to prevent ByteDance India from withdrawing funds from any other bank accounts linked to its tax identification number, the report said.

Reuters reported quoting a source that according to ByteDance India, the account blocking decision was an abuse of the legal process and would make it hard for it to pay salaries and taxes.

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