The Income Tax Appellate Tribunal (ITAT) has extended the stay on a tax demand of Rs 10,833.22 crore against Xiaomi Technology India for another 180 days, or until the disposal of the company's appeal, whichever is earlier. The order provides temporary relief to the smartphone maker as it continues to contest the assessment before the tribunal.
Revenue's Interests Protected
The tribunal observed that the Income Tax Department's interests remain protected as Xiaomi's fixed deposits worth approximately Rs 4,157 crore, including accrued interest, have already been attached. It also directed that the pending appeals be heard expeditiously and scheduled the next hearing for 21 September.
The disputed tax demand relates to transfer pricing adjustments and other issues pertaining to the relevant assessment year. The stay was initially granted in August 2023 and has since been extended several times as the appeal remains pending.
Xiaomi has consistently challenged the tax assessment, maintaining that it has complied with Indian tax laws and that the additions made by the Income Tax Department are unsustainable. The latest order does not address the merits of the case but restrains the tax authorities from initiating recovery proceedings until the stay expires or the appeal is adjudicated.
The case is one of several tax and regulatory disputes involving the Chinese smartphone maker in India. While the tribunal's latest order provides Xiaomi with interim relief, it also underscores the need for an early resolution of the long-pending litigation. The tribunal's final ruling will determine the company's tax liability and could have wider implications for the tax treatment of similar cross-border transactions involving multinational technology companies. |
