ByteDance has informed an Indian court docket {that a} authorities freeze on its bank accounts in a probe of potential tax evasion amounts to harassment and was finished illegally, in accordance to a submitting seen by Reuters.
ByteDance in January decreased its Indian workforce after New Delhi maintained a ban on its well-liked 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 apps.
An Indian tax intelligence unit in mid-March ordered HSBC and Citibank in Mumbai to freeze bank accounts of ByteDance India because it probed some 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 staff have been paid their March salaries due to the account freeze, stated two individuals acquainted with the matter. The firm informed the court docket it has a workforce of 1,335, together with outsourced personnel.
In the 209-page court docket submitting lodged on March 25, ByteDance informed the High Court in Mumbai the authorities acted in opposition to the corporate with none materials proof and gave no prior discover, as required by Indian legislation, earlier than such “drastic action”.
Blocking accounts “during the process of investigation amounts (to) applying undue coercion,” ByteDance argued. It is “intended, improperly, to harass the petitioner.”
India`s Directorate General of Goods & Services Tax Intelligence, and the finance ministry which oversees it, didn’t instantly reply to requests for remark over the weekend.
The particulars of the tax investigation haven’t beforehand been reported. The tax company informed 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 informed 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 speedy reduction in a quick listening to on Wednesday. The subsequent 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 court docket its India workforce contains 800 individuals working in its “trust and safety” staff that helps actions like content material moderation abroad.
The firm has “robust business plans in India and is not contemplating winding up,” it stated, urging the court docket 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 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 multiple times” earlier than tax officers and offered paperwork, the submitting says.
TikTok, one of India`s hottest video apps earlier than it was banned, has confronted scrutiny world wide.
Under then-President Donald Trump, the United States alleged the app posed nationwide safety considerations. The 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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