Two people directly familiar with the matter told Reuters that Indian authorities have prevented at least two of ByteDance’s bank accounts from being suspected of tax evasion, prompting it to request the court to revoke its instructions that it feared would affect its operations.

After New Delhi decided to retain the ban on its popular video app TikTok, ByteDance cut India’s workforce in January, which was first banned last year after the Sino-Indian border conflict.

China has repeatedly criticized India’s actions and expressed suspicion that India violated WTO rules.

ByteDance issued a statement against the Indian decision. The company has approximately 1,300 employees in India, most of which provide services for its overseas operations, including activities such as content review.

In mid-March, the authorities ordered the blockade of ByteDance India’s two bank accounts at Citibank and HSBC because of the alleged evasion of certain taxes in an online advertising transaction between the Indian ByteDance division and its Singaporean parent company TikTok Pte Ltd. The two sources said.

The first source said that the authorities also instructed Citibank and HSBC to prevent ByteDance India from withdrawing funds from any other bank accounts associated with its tax identification number.

In court documents, ByteDance India is likely to be heard by the High Court in the financial capital Mumbai this week, stating that although its account only has about 10 million U.S. dollars (about 73 crore rupees), the deterrent decision The source added that this is an abuse of legal procedures that will make it difficult to pay wages and taxes.

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Since the details of the bank freeze and the company’s court challenge have not been made public, neither of these two sources have been confirmed.

ByteDance said, “We do not agree with the tax authorities’ decision,” adding that it is committed to complying with the law and will cooperate with the government.

Citibank and HSBC declined to comment, while the Ministry of Finance did not respond to requests for comment.

The TikTok app ban was implemented when India banned dozens of Chinese apps last year, out of national security and sovereignty considerations.

After clashes at the controversial Himalayan border site resulted in the deaths of 20 Indian soldiers, this move has extensive links with India’s widespread withdrawal of Chinese companies.

The source said that the order to freeze ByteDance India’s bank accounts was made after the tax department inspected documents in the company’s office last year, carefully reviewed the documents, and questioned some executives related to the parent company’s advertising and other transactions. .

Stagnant business

According to the source, ByteDance India stated in its court documents that its entire business has come to a halt due to the bank freeze, and this behavior violated its right to “carry out free trade and business.”

A second source said: “The company is already struggling with the Indian ban. This may hit employee salaries and seller payments.”

TikTok has been subject to strict scrutiny worldwide. During the tenure of former U.S. President Donald Trump, the company claimed that the application constituted a national security issue because the Chinese government could obtain personal data of American users, but the company denied the accusation.

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The new administration of US President Biden has suspended a government lawsuit, which may result in a de facto ban on the use of TikTok in the United States.

Thomson Reuters 2021 ©

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