HP faces Rs 100cr tax penalty

Alleged duty evasion since 2004

MUMBAI: HP India, the local arm of Hewlett Packard, the global information technology major, is likely to face a penalty of Rs 100 crore for alleged duty evasion on import of hardware and software since 2004.

A source in the Directorate of Revenue Intelligence said the case is under investigation.
“The duty evasion is of about Rs 60 crore,” he said.

That, along with penal interest accrued for four years, would mean a hit of Rs 100 crore, said sources.

HP is alleged to have maintained parallel price lists of products such as laptops since 2004.

Products on one price list were priced about 45% lower than on the other list, which led to lesser duty payments.

On September 24, 2008, DRI had raided HP India office premises in Gurgaon, New Delhi and Bangalore, which led to the seizure of price invoices, different varieties of price lists, email correspondences and other documents which bared pricing inconsistencies, the official said.

HP India officials were not directly available to comment, but a statement from the company spokesperson said, “We are cooperating with the DRI in so much as it is appropriate and possible for us to do so. As a matter of policy, HP does not comment on whether it has or has not received subpoenas in connection with particular government inquiries involving our business, our vendors, customers or other companies with whom we have business relationships.”

Sources said HP India has already deposited Rs 34 crore with the customs department towards the levy.