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Exclusive: ByteDance says freezing Indian bank accounts is harassment

© Reuters.File Photo: File Photo: The ByteDance logo is displayed in this figure

By Abhirup Roy and Aditya Kalra

Mumbai (Reuters)-China’s ByteDance told Indian courts that the government’s freeze on bank accounts to investigate possible tax evasion was harassment and illegal.

ByteDance in January cut India’s workforce after New Delhi maintained a ban on the popular video app TikTok imposed after the Indian-Chinese border clash last year. Beijing has repeatedly criticized India for its ban and the ban on other Chinese apps.

In mid-March, India’s Tax Intelligence Unit ordered HSBC and Citibank in Mumbai to freeze ByteDance India’s bank account when investigating some of the unit’s financial transactions. ByteDance has challenged the freeze of four accounts in a court in Mumbai.

ByteDance India employees have not been paid for March because their accounts have been frozen, two people familiar with the matter said. The company told the court that it has a workforce of 1,335, including outsourced personnel.

ByteDance, in a 209-page court submission filed on March 25, told the High Court in Mumbai that authorities acted against the company without significant evidence and were required by Indian law. Said he did not give advance notice prior to such “dramatic action.”

ByteDance claimed to block accounts “in the process of investigation, in order to apply excessive coercion.” “Harassing the petitioner is inappropriately intended.”

India’s Goods and Services Tax Intelligence Bureau and its oversight, the Treasury, did not immediately respond to requests for comment over the weekend.

No details of the tax audit have been reported so far. Tax authorities told ByteDance last year that there was reason to believe that the company had curtailed certain transactions and claimed excessive tax credits, Filing said.

ByteDance refused to comment on the submission to court, but told Reuters on Tuesday that it disagreed with the tax authorities’ decision. HSBC declined to comment, but Citibank did not respond.

Scrutiny of advertising and other transactions

The court refused to give ByteDance immediate relief at a short hearing on Wednesday. The next hearing is scheduled for Tuesday.

The study focuses on tax evasion potential related to online advertising and other financial transactions between ByteDance India and Singapore’s parent company TikTokPte Ltd. TikTok did not respond to the email asking for comment.

ByteDance told the court that India’s workforce includes 800 people working on a “trust and safety” team that supports activities such as content moderation abroad.

The company said it had a strong business plan in India and is not considering liquidation, and asked the court to unfreeze the account.

The tax office began investigating the company in July. According to Filing, the company inspected the documents at the company’s office and summoned at least three executives to ask questions. Authorities also asked ByteDance to submit documents such as invoices and contracts signed with some clients.

ByteDance representatives “appeared multiple times” in front of tax officials and provided the documentation, Filing said.

Before being banned, one of India’s most popular video apps, TikTok, has been scrutinized around the world.

Under then-President Donald Trump, the United States claimed that the app raised national security concerns. Joe Biden’s new administration has suspended government proceedings that may have resulted in a virtual ban on the use of TikTok there.



Exclusive: ByteDance says freezing Indian bank accounts is harassment

https://www.investing.com/news/stock-market-news/exclusive-bytedance-says-indias-freeze-on-bank-accounts-is-harassment–court-filing-2465224 Exclusive: ByteDance says freezing Indian bank accounts is harassment

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