ByteDance says India's freeze on bank accounts is harassment
Last updated on: 05 April,2021 08:55 am
None of ByteDance India's employees have been paid their March salaries.
MUMBAI (Reuters) - China’s ByteDance has told an Indian court that a government freeze on its bank accounts in a probe of possible tax evasion amounts to harassment and was done illegally, according to a filing seen by Reuters.
ByteDance in January reduced its Indian workforce after New Delhi maintained a ban on its popular video app TikTok, imposed last year after a border clash between India and China. Beijing has repeatedly criticised India over that ban and those of other Chinese apps.
An Indian tax intelligence unit in mid-March ordered HSBC and Citibank in Mumbai to freeze bank accounts of ByteDance India as it probed some of the unit’s financial dealings. ByteDance has challenged the freeze on the four accounts in a Mumbai court.
None of ByteDance India’s employees have been paid their March salaries due to the account freeze, said two people familiar with the matter. The company told the court it has a workforce of 1,335, including outsourced personnel.
In the 209-page court filing lodged on March 25, ByteDance told the High Court in Mumbai the authorities acted against the company without any material evidence and gave no prior notice, as required by Indian law, before 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, did not immediately respond to requests for comment over the weekend.
The details of the tax investigation have not previously been reported. The tax agency told ByteDance last year it had reasons to believe the company suppressed certain transactions and claimed excessive tax credits, the filing shows.
ByteDance declined to comment on its court filing but told Reuters on Tuesday it disagrees with the decision of the tax authority. HSBC declined to comment, while Citibank did not respond.