Xiaomi takes $72 million tax dispute to India's Supreme Court
Xiaomi India is taking its fight to the Supreme Court after a tax tribunal said it had evaded about $72 million in customs duties related to royalty payments over at least three years leading up to 2020.
The tribunal included royalties and license fees paid to foreign firms such as Qualcomm as part of the import value, which bumped up Xiaomi's tax bill.
Potential ripple effects and financial strain
Xiaomi says these royalty payments are for tech used after import, so they shouldn't count toward customs duties.
If the court sides with the government, not only could Xiaomi face over $150 million in total liabilities (with interest and penalties), but other industries like pharma and auto might also get hit by similar rules.
This comes as Xiaomi's profits are already under pressure, especially with around $610 million frozen by authorities since 2022 over alleged illegal money transfers.