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Xiaomi India paid Rs 4,663 cr to Qualcomm as royalty remittance

After the Enforcement Directorate (ED) seized nearly Rs 5,551.3 crores from Xiaomi India under Foreign Exchange Management Act (FEMA) for illegal remittances to foreign realities, dependable sources said on Monday that about 84 percent of the seized kingliness remittances were made to US- grounded chip maker Qualcomm Group.

New Delhi, May 16 (IANS) After the Enforcement Directorate (ED) seized nearly Rs 5,551.3 crores from Xiaomi India under Foreign Exchange Management Act (FEMA) for illegal remittances to foreign realities, dependable sources said on Monday that about 84 percent of the seized kingliness remittances were made to US- grounded chip maker Qualcomm Group.


Sources close to the development told IANS that roughly Rs 4,663.1 crores were paid to Qualcomm via proper banking channels.

Xiaomi uses Qualcomm chipsets in the maturity of its bias and pays kingliness to the US- grounded major for colorful licensed technologies that include standard essential patents and other intellectual property (IP), beyond just using its chipsets.
Any smartphone or other consumer electronics company that doesn’t make kingliness payments can be penalized for patent violation.

Still, according to the ED, Xiaomi didn’t mileage any similar third-party services.
In a press release, the watchdog had said that”Xiaomi India has not profited any service from the three foreign- grounded realities to whom similar quantities have been transferred”.

In a statement, Xiaomi India said it can not note as the matter is in court.
“This matter is subjudice and under the consideration of the court of law. We refuse to note on this,” the company told IANS.

Last week, in a major relief to Xiaomi India, the Karnataka High Court permitted it to take overdrafts from banks and make payments.
Still, the court barred the payment of technology kingliness.

Holiday Judge JusticeS. Sunil Dutt Yadav also extended the interim order till May 23 and stated that the matter is now between the banks and the supplicant company.
The court had given a tentative stay on the order given by the Enforcement Directorate (ED) on April 29 to seize Rs 5,513.3 crore.

The ED took the step after invoking the Foreign Exchange Management Act, 1999.
Elderly advocateS. Ganeshan argued that Xiaomi India was being targeted as it’s a Chinese company and other companies are allowed to make payments of technology kingliness.

Seeking explanation on the before interim order on May 5, he argued that banks aren’t allowing Xiaomi to make remittances in foreign exchange for significance following the court order.
He explained that the company is needed to make payments to foreign companies in connection with manufacturing and marketing smartphones.

Xiaomi maintained that kingliness payments made to three companies abroad would not violate the FEMA Act. The company further maintained that the I-T Department itself had allowed it as a value-added exertion.

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