ByteDance’s bank accounts in the country have been frozen due to tax evasion issues.
The development comes two months after the government finally banned the Chinese tech giant’s flagship app TikTok, which led to the suspension of Indian business.
ByteDance has challenged the ban in a Mumbai court, arguing the ruling is an abuse of legal process and will make it harder to pay salaries and taxes, News Wire told Reuters on Tuesday.
In mid-March, two of ByteDance India’s bank accounts – at Citibank and HSBC – were blocked by authorities on alleged tax evasion in online advertising deals between the Indian entity and TikTok Pte Ltd – the parent company in Singapore, Reuters reported, citing two sources.
“Although the company has laid off most of its employees, there are still a significant number of employees on the job. With the accounts locked, the company is concerned about how salaries can be paid and other business done, ”an official who was briefed on the development told ET.
ByteDance continues to employ approximately 1,300 people in India, most of whom oversee its overseas activities, including working on activities such as content moderation.
“At ByteDance we are committed to complying with local laws and regulations,” a company spokesman told ET in response to an email request. “Although we do not agree with the decision of the tax authorities on this matter, we will extend our full cooperation to.” the government.”
According to the Reuters report, authorities have also ordered Citibank and HSBC not to allow ByteDance India to withdraw funds from other bank accounts linked to its tax identification number.
The company said its entire business came to a standstill due to the freeze and that such action violated its “free trade and business” rights.
The judicial filing should be negotiated soon.
The company has said it only has about $ 10 million in its accounts, but government measures will prevent it from paying salaries and taxes on time.
Last year, the tax authorities checked the documents in the company’s office, examined the documents and interviewed some executives regarding advertising and other transactions with the parent company.
TikTok was banned last year following a series of orders from the Department of Electronics and IT to block over 250 Chinese apps. The ban applied to well-known apps such as WeChat, AliExpress, PubG and the e-commerce platform ClubFactory.
With contributions from Reuters