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India blocks financial institution accounts of China’s ByteDance, firm mounts problem

Reuters


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NEW DELHI — Indian authorities have blocked at the least two of ByteDance’s financial institution accounts for alleged tax evasion, prompting it to ask a court docket to quash the directive that it fears will hit its operations, two sources with direct information informed Reuters.

ByteDance in January lower its Indian workforce after New Delhi determined to retain a ban on its in style video app TikTok, first prohibited final yr following a border conflict between India and China.

China has repeatedly criticized India’s transfer and stated it suspected it was towards WTO guidelines.

ByteDance, which issued a press release contesting the Indian choice, has round 1,300 workers in India, most of whom service its abroad operations, together with work on actions, equivalent to content material moderation.

In mid-March, authorities ordered two of ByteDance India’s financial institution accounts in Citibank and HSBC to be blocked due to alleged evasion of sure taxes in internet marketing dealings between the ByteDance unit in India and its dad or mum entity in Singapore, TikTok Pte Ltd, the 2 sources stated.

The authorities additionally directed Citibank and HSBC to stop ByteDance India from withdrawing funds from some other financial institution accounts linked to its tax identification quantity, the primary supply stated.

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In a court docket submitting, which is prone to be heard this week at a Excessive Courtroom within the monetary capital Mumbai, ByteDance India has stated that though it had solely about $10 million in its accounts, the blocking choice was an abuse of the authorized course of and would make it exhausting for it to pay salaries and taxes, the supply added.

Each the sources declined to be recognized as the main points of the financial institution freeze and firm’s court docket problem weren’t public.

ByteDance stated “we disagree with the choice of the tax authority” on this matter, including that it was dedicated to authorized compliance and can cooperate with the federal government.

Citibank and HSBC declined to remark, whereas the finance ministry, didn’t reply to a request for remark.

The TikTok app ban was imposed when India banned dozens of Chinese language apps final yr saying it was within the curiosity of nationwide safety and sovereignty.

The transfer was extensively linked to India’s broader pushback towards Chinese language companies after clashes at a disputed Himalayan border web site left 20 Indian troopers lifeless.

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The directive to freeze ByteDance India’s financial institution accounts got here after tax authorities final yr inspected paperwork on the firm’s workplace, scrutinized paperwork and questioned some executives in relation to the promoting and different transactions with its dad or mum entity, the primary supply stated.

BUSINESS AT A STANDSTILL

In its court docket doc, which the supply was aware of, ByteDance India has stated its complete enterprise had come to a standstill due to the financial institution freeze and that such an motion violates its rights “to hold free commerce and enterprise.”

“The corporate was already scuffling with the India ban. This may hit worker salaries, vendor funds,” the second supply stated.

TikTok had come underneath scrutiny all over the world. Throughout former U.S. president Donald Trump’s administration, which alleged that the app posed nationwide safety considerations as private information of U.S. customers may very well be obtained by China’s authorities, an allegation the corporate denied.

U.S. President Joe Biden’s new administration has paused a authorities lawsuit that would have resulted in a de facto ban on TikTok’s use in the US. (Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; modifying by David Evans and Barbara Lewis)

In-depth reporting on the innovation financial system from The Logic, dropped at you in partnership with the Monetary Publish.

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